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Here is financial information for each of the service types: Low-tech High-tech Total revenues $3,000 $9,000 Total customer-specific variable costs $1,000 $1,500 Total customer-specific fixed
Here is financial information for each of the service types:
Low-tech | High-tech | ||
Total revenues | $3,000 | $9,000 | |
Total customer-specific variable costs | $1,000 | $1,500 | |
Total customer-specific fixed costs | $400 | $1,000 | |
Total allocated general fixed costs | $100 | $180 |
Activities are measured in service hours.
The sales price per hour for low-tech is $15 per hour.
The sales price per hour for high-tech is $30 per hour.
The variable costs per hour is $5 per hour (for both low-tech and high-tech services).
Question:
1. Calculate the break-even point in hours for the firm as a whole, using the weighted average contribution margin method (i.e., composite method).
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