ACG 2071 - Comprehensive Problem III When submitting the completed project, it should include: 1. Please show all work and number each answer accordingly. 2. Round all answers to two decimal places. Part I-Use CVP to Plan Profits - (worth a total of 21 points - 3 points for each question) Nottingham News Company has the rights to sell and deliver the city newspaper in a designated area in the country. A monthly subscription sells for $30.00 and Nottingham News pays $10.00 per month for each newspaper subscription. In addition to this variable cost, Nottingham News has fixed costs of $3,000 per month. Nottingham News currently activity level is 700 subscriptions. Required: 1. Calculate the contribution margin ratio and explain the ratio as it pertains to Nottingham News Company. 2. Use the mathematical formula to calculate Nottingham News' monthly breakeven point in units (number of subscriptions). 3. Use the shortcut contribution margin approach to calculate Nottingham News' monthly breakeven in units (number of subscriptions). 4. Prove the breakeven point by preparing a contribution margin income statement. 5. Use the contribution margin ratio, which you calculated in number one to compute Nottingham News' breakeven point in sales dollars. 6. Calculate the margin of safety ratio and explain the ratio as it pertains to Nottingham News Company. 7. The owner of Nottingham News' wants to earn a $10,000 profit per month. Calculate the sales volume in units (number of subscriptions) and sales dollars required to achieve this level of profit. - This is your third Comprehensive Problem covering CVP Analysis. This problem covers Cost Behavior and Cost Analysis for companies that sell a sing product and then multiple products. Therefore, you will need to be familiar with the Break-even point formulas for a single product and multiple products. Remember, when more then one product is sold the break-even formula uses the weighted average contribution margin per unit. - Please refer to the additional study material provided for Chapter 21 to assist you completing the assignment. In addition, make sure to watch the comprehensive problem III overview video for helpful hints on completing the assignment. Please Note that once the assignment is submitted it cannot be taken back and corrected. ACG 2071 - Comprehensive Problem III When submitting the completed project, it should include: 1. Please show all work and number each answer accordingly. 2. Round all answers to two decimal places. Part I-Use CVP to Plan Profits - (worth a total of 21 points - 3 points for each question) Nottingham News Company has the rights to sell and deliver the city newspaper in a designated area in the country. A monthly subscription sells for $30.00 and Nottingham News pays $10.00 per month for each newspaper subscription. In addition to this variable cost, Nottingham News has fixed costs of $3,000 per month. Nottingham News currently activity level is 700 subscriptions. Required: 1. Calculate the contribution margin ratio and explain the ratio as it pertains to Nottingham News Company. 2. Use the mathematical formula to calculate Nottingham News' monthly breakeven point in units (number of subscriptions). 3. Use the shortcut contribution margin approach to calculate Nottingham News' monthly breakeven in units (number of subscriptions). 4. Prove the breakeven point by preparing a contribution margin income statement. 5. Use the contribution margin ratio, which you calculated in number one to compute Nottingham News' breakeven point in sales dollars. 6. Calculate the margin of safety ratio and explain the ratio as it pertains to Nottingham News Company. 7. The owner of Nottingham News' wants to earn a $10,000 profit per month. Calculate the sales volume in units (number of subscriptions) and sales dollars required to achieve this level of profit. - This is your third Comprehensive Problem covering CVP Analysis. This problem covers Cost Behavior and Cost Analysis for companies that sell a sing product and then multiple products. Therefore, you will need to be familiar with the Break-even point formulas for a single product and multiple products. Remember, when more then one product is sold the break-even formula uses the weighted average contribution margin per unit. - Please refer to the additional study material provided for Chapter 21 to assist you completing the assignment. In addition, make sure to watch the comprehensive problem III overview video for helpful hints on completing the assignment. Please Note that once the assignment is submitted it cannot be taken back and corrected
