Question 1: CVP relation Sales volume in units 100 Revenue $4,000 Variable costs $2,000 Contribution margin $2,000 Fixed costs $1,200 Profit $800 a) Compute the following items: price= unit VC= unit CM= b) Write down the CVP relation. Profit = * volume - (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: d) Your boss gave you a profit target of $1,400. How many units do you need to sell to meet this target? e) Compute the breakeven point: breakeven volume = 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? YES NO If sales decrease by 45%, will you lose money? YES NO g) When sales volume increases by 10 units (from any initial level in the relevant range), profit increases by: o not enough information unit VC*10 = $200 price* 10 = $400 unit CM*10 = $200