Part ABreak-Even Analysis

The management of Genuine Spice Inc. wishes to determine the number of cases required to break even per month. The utilities cost, which is part of factory overhead, is a mixed cost. The following information was gathered from the first six months of operation regarding this cost:

2016	Case Production	Utility Total Cost
January	500	$600
February	800	660
March	1,200	740
April	1,100	720
May	950	690
June	1,025	705

Required:

1. Determine the fixed and variable portion of the utility cost using the high-low method. Round the per unit cost to the nearest cent.

	At High Point	At Low Point
Variable cost per unit	$	$
Total fixed cost	$	$
Total cost	$	$

2. Determine the contribution margin per case. Enter your answer to the nearest cent.

Contribution margin per case $

3. Determine the fixed costs per month, including the utility fixed cost from part (1).

Utilities cost (from part 1)	$
Facility lease	$
Equipment depreciation	$
Supplies	$
Total fixed costs	$

4. Determine the break-even number of cases per month. cases