Lambda Retail

Scenario: Perform CVP Analysis

Data:

• Sales Price per Unit: $80
• Variable Cost per Unit: $50
• Fixed Costs: $200,000

Requirements:

1. Calculate the Contribution Margin per unit and Contribution Margin Ratio.
2. Determine the Breakeven Point in units and sales dollars.
3. Perform sensitivity analysis for a 15% increase in sales volume.
4. Discuss the implications of CVP analysis on pricing and profitability for Lambda Retail.
5. Recommend strategies to improve the breakeven point and overall profitability.