Prompt Milestone Two $-$ Contribution Margin Analysis

COLLARS

Sales Price per Unit

Variable Cost per Unit

Contribution Margin

LEASHES

HARNESSES Milestone Two $-$ Break$-$Even Analysis

Target Profit

LEASHES

Sales Price

HARNESSES

Fixed Costs

Contribution Margin

$

$

Break$-$Even Units $($round up$)$

Break$-$Even Units $($round up$)$

Target Profit

$$,500\mathrm{.}00$

$

$600\mathrm{.}00$

$

$

$500\mathrm{.}00$

Break$-$Even Units $($round up$)$

Use information from Milestone One and the provided Milestone Two Market Research Data Appendix Word Document to conduct a cost$-$volume profit analysis. Complete the $$Contribution Margin Analysis$$ and $$Break$-$Even Analysis$$ tabs in the Project Workbook Spreadsheet that you used for completing the Milestone One assignment.

Specifically, you must address the following rubric criteria:

Contribution Margin. Determine your contribution margin per unit in the $$Contribution Margin Analysis$$ tab.

Choose a sales price for each product.

Calculate the contribution margin for each product based on your sales price and the variable cost for that product. Show your work using calculations to the side of the table or using appropriate formulas in the table.

Break$-$Even Analysis. Use cost$-$volume$-$profit $($CVP$)$ analysis to determine your break$-$even points for achieving your target profits in the $$Break$-$Even Analysis$$ tab.

Determine the break$-$even points for each product. Show your work using calculations to the side of the table or using appropriate formulas in the table.

Determine break$-$even units for the suggested target profits for each product. Show your work using calculations to the side of the table or using appropriate formulas in the table.Milestone Two $-$ Break$-$Even Analysis

Target Profit

LEASHES

Sales Price

HARNESSES

Fixed Costs

Contribution Margin

$

$

Break$-$Even Units $($round up$)$

Break$-$Even Units $($round up$)$

Target Profit

$$,500\mathrm{.}00$

$

$600\mathrm{.}00$

$

$

$500\mathrm{.}00$

Break$-$Even Units $($round up$)$

You have conducted some market research for style and size of products you want to use to launch

your business. The market research has indicated the following sales price ranges will be optimal for

your area depending on style of products you choose to sell:

Collars

With pricing at $$20$ per collar, you can expect to sell $30$ collars per day.

With pricing at $$24$ per collar, you can expect to sell $25$ collars per day.

With pricing at $$28$ per collar, you can expect to sell $20$ collars per day

Leashes

With pricing at $$22$ per leash, you can expect to sell $28$ leashes per day.

With pricing at $$26$ per leash, you can expect to sell $23$ leashes per day.

With pricing at $$30$ per leash, you can expect to sell $18$ leashes per day.

Harnesses

With pricing at $$25$ per harness, you can expect to sell $25$ harnesses per day.

With pricing at $$30$ per harness, you can expect to sell $22$ harnesses per day.

With pricing at $$35$ per harness, you can expect to sell $20$ harnesses per day.

Additionally, you will need to compare your break$-$even points for the following target profits for

each area of your business to determine your prices:

Collars

Break$-$even

$$300$ target profit each month

$$500$ target profit each month

Leashes

Break$-$even

$$400$ target profit each month

$$600$ target profit each month

Harnesses

Break$-$even

$$500$ target profit each month

$$650$ target profit each month

Remember that all break$-$even and target points must be in whole units $($we cannot sell a partial

unit$).$ Round up when calculating partial units to ensure costs are covered. Excel tip $-$ use

ROUNDUP function