Profit decisions are important to the Martins. These decisions arise from understanding the market, pricing policies and margins. The managers need to understand the appropriate tools and elements as they target profit levels and their ability to manage the elements of the profit calculation. For example, if CompuTech is operating at a loss or below break-even, then must understand how they can manage costs or volumes to generate profits. Break-even analysis can help the Martins and CompuTech decide how many packages they need to sell, what price should they sell at, fixed costs levels, and what product or service they should promote.

Given the following:

CompuTechs products are sold for $100 per package

CompuTechs products cost $60 per package

Fixed Costs are determined by the Income Statement

Q1: Create a data table and CVP table to reflect the available information. (copy and paste your

Module 2 work).

Q2: What is the break-even in units for CompuTech in 2021?

Q3: Create a separate data table and CVP to answer the following question:

Variable cost of materials rose by 10% during the year, and CompuTech plans to hire a Sheridan student (annual cost for Part Time service is $30,000 per year) to help CompuTechs marketing. How does the variable cost increase and hire impact CompuTechs break-even?