Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Cost, Volume, Profit (CVP) Analysis Bob begins his own businesich he can buy widgets for $80 each and sell each for a price of $175.

image text in transcribed
Cost, Volume, Profit (CVP) Analysis Bob begins his own businesich he can buy widgets for $80 each and sell each for a price of $175. In orde to the public Bob needed to rent space in a local building down on Main street he rent cost's Bob $1,170 per month. In addition Bob has hired a salesman, Mike, to sell the widgets for him (while he vacations). Bob wants to encourage Mike to sell as many widgets as he can so he pays Mike on commission. For every widget Mike sells Bob will pay him $30. 1. Please set up an Excel spreadsheet which will calculate the number of widgets Bob must sell in order to breakeven. (Remember there are two variable costs) 2. How much does that translate to in sales revenue (that is the amount of sales dollars to breakeven)? I 3. How much is Bob's contribution margin per widget? 4. If Bob is not happy unless he makes $6,500 profit per month, how many widgets must Mike sell? 5. How much will Mike receive at the breakeven point? 6. How much will Mike receive if he sells enough to make Bob happy (that is $6,500 profit)? Please deposit your completed spreadsheet in the drop-box with the name "Cost, Volume, Profit Analysis

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

Step: 3

blur-text-image

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

Management And Cost Accounting

Authors: Charles T. Horngren, George Foster, Srikant M. Datar

3rd Edition

ISBN: 0273687514, 978-0273687511

More Books

Students also viewed these Accounting questions