Cost-Volume-Profit Analysis at Amazon

Values:

• Selling Price per Unit: $140
• Variable Cost per Unit: $100
• Fixed Costs: $8,000,000

Requirements:

1. Calculate the break-even point in units.
2. Determine the sales volume needed to achieve a profit of $2,000,000.
3. Analyze the impact of an increase in variable costs on the break-even point.
4. Discuss strategies to reduce the break-even point.