Theta Manufacturing Co.

Scenario: Cost-Volume-Profit (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 Theta Manufacturing Co.'s pricing strategy.