Cost Behavior Analysis at Walmart

• Values:

• Total Costs: $50,000,000
• Fixed Costs: $20,000,000
• Variable Costs per Unit: $10
• Sales Revenue: $75,000,000
• Requirements:

0. Classify each cost component as fixed or variable for Walmart.
1. Calculate the contribution margin ratio and break-even point in units and dollars.
2. Discuss how cost behavior analysis helps in pricing decisions and profitability analysis at Walmart.
3. Recommend pricing strategies to optimize Walmart’s profitability.