100,000 Units Traditional Income Statement 1 Look at the Income Statement to the right ## Revenue ##### Variable Fixed $1,046,000 $ 105,000 Revenue is 100,000 units sold for $1,500,000 Cost of Goods Sold ########## Gross Profit $349,000.00 Look at this income statement-they lost $100,000 How many more would they have had to sell to break even (0 profit)? Selling Expense Admin Expense $250,000.00 $270,000.00 $ 100,000 $150,000 $ 54,000 $ 216,000 $1,200,000 $ 471,000 Net Loss $(171,000.00) 2 Look at the CVP template file on Canvas and see if you can put the given revenue and costs into a CVP income statement for This Company. The problem gives the variable and fixed amounts for each type of expense Create CVP Income Statement Belc (or on separate paper) 3 Use the following formulas to find the Break even points Break even in Units = Fixed Costs / Unit Contribution Margin Break even in $$ = Fixed Costs / Contribution Margin% NOTE: The break even in units will not be a whole number you will have to round. Answers: Break even in Units Break even in $$$ 4 If they increase the number of units sold by 10% (10,000) How much is net income or loss? 5 Company sells 2 products Products % of Business Contribution Margin Tablets MP3 Players 60% 40% 30% 35% Fixed Cost $ 120,000 a Break Even in $$$$$ b 0 How much $$ Tablets How Much $SMP-3 Players C 0