CVP Analysis - Case Study QUESTION (1) Patrick Ross has three booth rental options at the county fair where he plans to sell his new product. The booth rental options are: Option : $1,000 fixed fee, or Option 2: $750 fixed fee + 5% of all revenues generated at the fait, or Option 3 : 20% of all revenues generated at the fair. The product sells for $37.50 per unit. He can purchase the units for $12.50 each. Compute the breakeven point for each option Which option should Patrick choose to maximize income? QUESTION (2) Nancy's Niche sells a single product. 8,000 units were sold resulting in $80,000 of sales revenue, $20,000 of variable costs, and S10,000 of fixed costs The contribution margin per unit is? The breakeven point in total sales dollars is: To achieve $100.000 in operating income, sales must total: If variable costs decrease by St per unit, the new breakeven point is: QUESTION (3) CRITICAL THINKING What is meant by the term breakeven point? Why should a manager be concerned about the breakeven point