Northlake Nordic Centre Inc.: price 30 per skier-day, variable cost 9, fixed costs $315,000. Compute break-even in skier-days and in sales dollars, and prove it by stating contribution margin and operating income at that volume.
Northlake Nordic Centre Inc.: price 30 per skier-day, variable cost 9, fixed costs $315,000. Compute break-even in skier-days and in sales dollars, and prove it by stating contribution margin and operating income at that volume.
Answer
Break-even in skier-days → 15000 · Break-even in sales dollars → 450000 · Contribution margin at break-even → 315000 · Operating income at break-even → 0
Cells - Break-even in skier-days · ±0 - Break-even in sales dollars · ±0 - Contribution margin at break-even · ±0 - Operating income at break-even · ±0 Units: 315,000 ÷ 21 = **15,000**. Dollars: 15,000 × 30 = 315,000 ÷ 0.70 = **450,000**. Proof: sales 450,000 − variable 135,000 = CM **315,000** = fixed costs, so operating income **0**. Excel: `=315000/21`, `=315000/0.7`.
Hermanson Vol 2 ch 21 (break-even in units and dollars, proof by statement); OpenStax Managerial Accounting §3.2 (concept map J2, J3)