Question 1: CVP relation Sales volume in units 100 Revenue Variable costs $4,000 $2,000 $2,000 Contribution margin Fixed costs $1,200 Profit $800 a) Compute the following items: price= 40 unit VC= 20 unit CM= 20 b) Write down the CVP relation. Profit = 20 * volume - 1200 (e.g., if Profit=4*volume-1000, enter 4 in the first box and 1000 in the second box). c) Predict profit at sales volume of 120 units: 400 d) Your boss gave you a profit target of $1,400. How many units do you need to sell to meet this target? 130 e) Compute the breakeven point: breakeven volume = 60 breakeven revenue = f) Compute the margin of safety at current sales volume of 100 units: (e.g., if your answer is 20%, enter 20 without the % sign) If sales decrease by 35%, will you lose money? OYES ONO If sales decrease by 45%, will you lose money? OYES ONO g) When sales volume increases by 10 units (from any initial level in the relevant range), profit increases by: O unit VC*10 = $200 unit CM*10 $200 O price*10 = $400 O not enough information