Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

answer 5-7 show formula and work please Here are the assumptions: Sales price per unit = $ 14.31 per unit Total Fixed costs = 1,052,800

answer 5-7 show formula and work please
image text in transcribed
Here are the assumptions: Sales price per unit = $ 14.31 per unit Total Fixed costs = 1,052,800 Variable cost per unit = $8.33 per unit Determine the following, showing both the formulas and calculations 1. Contribution margin per unit 2. Break-even point in units 3. Sales volume needed to reach a profit of $750,000 4. Now, apply the following INDEPENDENT changes and determine the impact on profitability (using sales units you calculated in 3 above) o Increase in sales price by 5% o Decrease in variable cost to $7.45 per unit o Change ibixed costs to 900,000 5. Create a Cost-Volume-Profit Graph for your last scenario above (fixed costs = $900,000) Be certain to include fixed, variable, break-even point and sales volume and translate your results. 6. If in this scenario where fixed costs = $900,000. your budgeted sales are 230K units, calculate your margin of safety? 7. Finally, prepare a sensitivity analysis, like the one shown in Exhibit 3.3 for our company, using the following what if scenarios, to calculate profitability (as in the Exhibit, incorporate these into one worksheet) Fixed costs in the range of $800K - 1,3M, in increments of 100K Variable costs in the range of $7.10 cost per unit, in $.50 increments Sales volume in units in the range of 150K - 500K units in increments of 50K units

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Principles Of Cost Accounting

Authors: Edward J. Vanderbeck

14th Edition

0324374178, 978-0324374179

More Books

Students also viewed these Accounting questions

Question

2. Do you agree that unions stifle creativity? Why or why not?

Answered: 1 week ago