Assignment: Fixed Costs, Variable Costs, and Break-Even Point
During the sixth month of the fiscal year, the program director of the Westchester Home-Delivered Meals (WHDM) program decides to again recompute fixed costs, variable costs, and the BEP using the high–low method. Here are the number of meals served and the total costs of the program for each of the first six months:
Served Total Costs
Recompute fixed costs, variable costs, and the BEP. What are the variable costs? What are the fixed costs? How many meals will the WHDM program need to provide during the fiscal year to reach the BEP? How much profit will the program earn if it completes its 45,000-meal contract with the City of Westchester?
The variable cost per meal:
The variable cost for the low month:
WHDM program profit analysis
= meal contract
Break Even Point (BEP) =
1,008 Meals at
Total Cost Per meal
Total Profit =
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