Are these numbers attainable? Please explain. List two suggestions you could give that would affect this break even point in a favorable manner, using the Break-Even Formula to justify them.

Current Application 4

Scenario 1

Fixed cost:

Fixed Cost Per Month
Shop	$400
Insurance	$200
monthly utilities	$95
Leasing of equipment	$200
Marketing	$105
Total	$1,000

Variable Cost:

Variable Cost
Friend	$10.00	Per hour	$45.00
Wax	$19.00	will yield 10 cars	$1.90
Towels, soap, and other supplies	$3.00	Per vehicle	$3.00
Total			$49.90

Per Vehicle Service Price = $120

Operating Margin = 120- 49.90 = 70.1

Break-even point = Fixed Cost / Operating Margin = 1,000/70.1 = 14.26 = 15 Vehicle

Scenario 2

In this scenario, fixed cost will get increased by 2,500. Hence total fixed cost will be 3,500.

Breakeven Point = 3,500/ 70.1 = 49.92 = 50 Vehicle