CVP Analysis

Determine the break-even point.

Compute the margin of safety and explain its significance.

Compute the degree of operating leverage at a particular level of sales and explain how it can be used to predict changes in net operating income.

Given the following information complete a CVP analysis for JPL, Inc: Unit sales Selling price per unit Variable expenses per unit Fixed expenses 11,200 units $75 per unit $45 per unit $210,000 Use the data to answer the following. 1. Compute the CM ratio and variable expense ratio Selling price per unit Variable expenses per unit Contribution margin per unit per unit per unit per unit CM ratio Variable expense ratio 2. Compute the break-even point Break-even in unit sales Break-even in dollar sales units