Classify the costs below as: Product-Direct, Product-Indirect, or Period AND Variable cost, Fixed cost, or Mixed cost. Below are budgeted income statements at different team levels, use the information to answer the questions below:

Number of Teams	15	25	30	Product Direct, Product Indirect or Period	Fixed/ Variable
Sales	$1,500	$2,500	$3,000
Cost of Goods Sold
Direct Materials	75	125	150
Direct Labor	150	250	300
Applied Overhead	575	625	650
Gross Profit	$700	$1,500	$1,900
Selling Expenses	300	500	600
Administrative Expenses	280	280	280
Advertising Expenses	200	200	200
Miscellaneous Administrative Expenses	100	100	100
Net Income	$(180)	$420	$720

Using the above data and the high/low method, answer the following questions:

Units Number of Teams	15	30
Net Income	(180)	720

Determine the variable cost per unit

Determine the fixed cost

What is the cost equation?

Estimate the total cost for 20 teams

In addition to the above data, assume the company has the following sales. Answer the following questions

Number of Teams	15	25	30
Sales	$1,500	$2,500	$3,000

What is the revenue generated per team?

What is the per unit contribution margin?

What is the contribution margin ratio?

Compute break-even point in dollars and in units (round to the next whole number) for each of the three scenarios. Then, choose a scenario for your team.

If CAVALRY wants to have net income of $100.00 from this event, how many teams are needed?

If CAVALRY estimates 20 teams, determine the Margin of Safety in sales dollars.

Perform a sensitivity analysis to determine how an increase in team revenue of $500 would impact Net Income?

If the team revenue changed to $120 per team, and all other expenses remained the same as calculated in your cost equation, what is the new break-even in units?

If the variable costs changed to $50 per team (the fix costs remained the same as in your cost equation and team revenue remained at $100 per team), what is the new break-even in units?

If the fixed costs changed to $980, (variable expenses remained the same as in your cost equation, and sales price remained at $100 per team), what is the new break-even in units?