Reference no: EM131491703

Write the definition for breakeven analysis in words and write the definition for breakeven analysis 

total revenues-total variables costs-fixed costs=profit

($50.x volume)-($20.xvolume)-500,000=profit

For accounting breakeven, profit is zero, so the equation becomes:

($50x volume)-($20x volume)=500,0000

or equivalent

(contribution margin x volume)=$500,000\

thus, the breakeven volume is $16,667 tests:

($30xvolume)=500,000

volume=$16,667 tests

For economic breakeven, insert the desired profit amount on the right side of the equation in place of $0.