Cost volume profit (CVP) analysis

Startup Graphic T-shirt business. Selling price = $30 per shirt.

- Make a projection of unit sales and dollar sales over the next upcoming 5 years.

- Make a list of all direct and indirect materials, including quantities, cost of material/unit. Make a projection over 5 years of these costs

- List all equipment you will need to make your product and estimate costs for all equipment (fixed costs). Make a projection over 5 years of these costs

- List all other expenses, rent, utilities, insurance, etc. (variable expenses, including labour). Make a projection over 5 years of these costs.

- Prepare a contribution margin statement with the above data over 5 years

- calculate break-even and margin of safety for the upcoming 5 years