rcise G Cost-volume-Profit Analysis ited 16.14 Break Even n Sales Revenue, Margin of and The agency Reps, Inc., represents professional athletes and movie revenue of si with total variable costs of 5678,700 and fixed costs of OBJECTIVE What is the contribution margin ratio for sports-Reps based on break-even sales last years data? what is the 3. What was the margin of safety for last One of Sports Reps agents proposed that the firm begin ing high school sports stars around the nation. Th costs of proposal expected to increase revenue by S230,000 per year, with Is a good idea? Explain Exercise 1 Break-Even in units. After Tax Target Income, Assumptions and The market covers both and sells adjustable attach homes new unit purchases a well as replacement canopies. Campbell developed 2013 business based on the that canopies would sell at a price of were The variable costs for each canopy were s200 and the annua efective tax at projected at was company rate is 40 percent. profit CMA While Campbell's sales usually rise during the second quarter, the May financial statements reported that sales were not meeting expectations. For months of the year, only 350 units had been sold at the the price, with variable costs as planned, and was clear that the 2013 after-tax profit projection would not were bell's president assigned a management committee to analyze the situation and develop several of action. The following mutually exclusive alternatives. labeled B, and c were presented to the president A. Lower the variable costs per unit by s25 through the use of less expensive materials and slightly modified manufacturing techniques. The sales price will also be reduced by S30, and sales of 2,200 units for the remainder of the year are forecast B. Reduce the sales price by S40. The sales organization forecasts that with the significantly reduced sales price, 2,700 units can be sold during the remainder of the year. Total fixed and variable unit costs will stay as budgeted C. Cut fixed costs by S10,000, and lower the sales price by 5 percent. Variable costs per unit will be unchanged. Sales of 2,000 units are expected for the remainder of the year Required I. Determine the number of units that Campbell Company must sell in order to break even assuming no changes are made to the selling price and cost structure Determine the number of units that Campbell Company must sell in order to achieve its 2. after-tax profit objective 3 Determine which one of the alternatives to annual after-tax profit objective. Be sure to support your selection with appropriate calculations The precision and reliability analysis are limited by Identify least four assumptions. (CMA adapted) eral underlying assumptions ercise 16.16 cvP: Before- and After-Tax Targeted Income OBJECT Company produces for racing, Head si per costs and fixed costs are rate is 25 year, l4,000 helmets were sold percent Last ar charges a price continued)