Topic: Cost-Volume-Profit Analysis

General Instructions

Assess each of the following situations and provide the appropriate answers including the details of all calculations required for each problem.

Problem #1

Brancati Inc. produces and sells two products. Data concerning those products for the most recent month appear below:

	Product W07C			Product B29Z
Sales	$	25,000			$	27,000
Variable expenses	$	7,000			$	8,600

Fixed expenses for the entire company were $32,860.

Required:

a. Determine the overall break-even point for the company in total sales dollars.

b. If the sales mix shifts toward Product W07C with no change in total sales, what will happen to the break-even point for the company?

Problem #2

Hawver Corporation produces and sells a single product. Data concerning that product appear below:

Selling price per unit	$	180.00
Variable expense per unit	$	81.00
Fixed expense per month	$	594,000

Required:

Assume the company's monthly target profit is $19,800. Determine the unit sales to attain that target profit.

Problem #3

Brihon Corporation produces and sells a single product. Data concerning that product appear below:

Selling price per unit	$	230.00
Variable expense per unit	$	103.50
Fixed expense per month	$	518,650

Required:

a. Assume the company's monthly target profit is $12,650. Determine the unit sales to attain that target profit.

b. Assume the company's monthly target profit is $63,250. Determine the dollar sales to attain that target profit.