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The CVP Card Company, a producer of specialty cards, is in the process of planning next year's operations. The company has asked you to complete
The CVP Card Company, a producer of specialty cards, is in the process of planning next year's operations. The company has asked you to complete several calculations based upon the following information for 50,000 cards: Total Per Unit Sales $350,000 $ 7.00 Variable costs: 4.40 60.000 1.20 70,000 1.40 Cost of goods sold 220,000 Selling and admin Contribution margin Fixed costs: Cost of goods sold Selling and admin Operating income 30,000 17.600 $ 22,400 1. How many cards must be sold to breakeven? 1. How many cards must be sold to breakeven? 2. How many cards must be sold for CVP Card Company to double its current operating income? In order to increase production, the company will need to purchase additional equipment that will increase total fixed expenses by $10,000 and increase total variable expenses by 10%. 3. Calculate the new variable cost per unit. 4. How many cards must be sold to breakeven if the equipment is purchased
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