RST Manufacturing Co.

Scenario: Perform CVP Analysis

Data:

• Sales Price per Unit: $100
• Variable Cost per Unit: $60
• Fixed Costs: $200,000

Requirements:

1. Calculate the Contribution Margin per Unit and Contribution Margin Ratio.
2. Determine the Breakeven Point in units and sales dollars.
3. Perform sensitivity analysis for a 10% increase in Variable Costs.
4. Discuss the implications of CVP analysis on RST Manufacturing Co.'s pricing strategy.