You have conducted some market research for style and size of products you want to use to launch your business. The market research has indicated the following sales price ranges will be optimal for your area depending on style of products you choose to sell:

Collars

oWith pricing at $20 per collar, you can expect to sell 30 collars per day.

oWith pricing at $24 per collar, you can expect to sell 25 collars per day.

oWith pricing at $28 per collar, you can expect to sell 20 collars per day

Leashes

oWith pricing at $22 per leash, you can expect to sell 28 leashes per day.

oWith pricing at $26 per leash, you can expect to sell 23 leashes per day.

oWith pricing at $30 per leash, you can expect to sell 18 leashes per day.

Harnesses

oWith pricing at $25 per harness, you can expect to sell 25 harnesses per day.

oWith pricing at $30 per harness, you can expect to sell 22 harnesses per day.

oWith pricing at $35 per harness, you can expect to sell 20 harnesses per day.

Additionally, you will need to compare your break-even points for the following target profits for each area of your business to determine your prices:

Collars

oBreak-even

o$300 target profit each month

o$500 target profit each month

Leashes

oBreak-even

o$400 target profit each month

o$600 target profit each month

Harnesses

oBreak-even

o$500 target profit each month

o$650 target profit each month

Question 1

Contribution Margin.Determine your contribution margin per unit in the "Contribution Margin Analysis" tab.

• Choose asales pricefor each product.
• Calculate thecontribution marginfor each product based on your sales price and the variable cost for that product. Show your work using calculations to the side of the table or using appropriate formulas in the table.

Collars Leashes Harnesses

Sales Price per Unit _________ __________ __________

Variable Cost per Unit _________ __________ __________

Contribution Margin _________ __________ ___________

Question 2

Break-Even Analysis.Use cost-volume-profit (CVP) analysis to determine your break-even points for achieving your target profits in the "Break-Even Analysis" tab.

• Determine thebreak-even pointsfor each product. Show your work using calculations to the side of the table or using appropriate formulas in the table.
• Determine break-even units for the suggestedtarget profitsfor each product. Show your work using calculations to the side of the table or using appropriate formulas in the table.

Collars Leashes Harnesses

Sales Price ______ _______ _______

Fixed Costs ______ _______ _______

Contribution Margin _______ ________ ________

Break Even Units (round up) _______ ________ _________

Target Profit $300 $400 $500

Break Even Units (round up) _______ _______ _______

Target Profit $500 $600 $650

Break Even Units (round up) _________ __________ ________