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CompIT sells technology set-up services for cloud computing. They have 3 packages: Standard, Deluxe, and Ultimate. Assume fixed cost (rent, utilities, wages, etc.) totaled
CompIT sells technology set-up services for cloud computing. They have 3 packages: Standard, Deluxe, and Ultimate. Assume fixed cost (rent, utilities, wages, etc.) totaled $360,000 for the prior year. Additional information for the prior year follows. Unit price Unit variable costs Standard Deluxe Ultimate $200 $400 $500 180 340 400 Unit contribution margin $20 $60 $100 Service packages sold 2,000 1,200 800 a. Using CVP analysis, determine the break-even dollars sales volume. $ 0 By doing more standard set-up services, the company is concentrating more on the contribution margin b. What will happen to the break-even sales volume if CompIT increases the percentage of clients only requiring the standard service package? If CompIt begins doing more standard set-up service packages, the break-even sales volume will product. Consequently, it will need to bring in Please answer all parts of the question. revenue to break even.
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