Question

CVP analysis

Sales Revenue Per Unitt som Variable costs per unit $31 . Fixed Costs $151,875 * Create formulas in the appropriate locations for all remaining elements except Units Soid, which should remain blank. Use Goal Seek to determine the breakeven unit sales. Create a second CVP Analysis tab (named appropriately) and use Goal Seek to deter- mine unit sales necessary to generate a net income of $72,000. Create a third CVP Analysis tab (named appropriately) and use Solver to determine the maximnum net income if all of the following apply: unit sales remain the same as those in the second CVP analysis, sales revenue per unit cannot exceed $43, vanable costs per unit cannot fall below $28, fixed costs cannot fall below $150,000, and contribution margin as a percentage of sales revenue cannot exceed 34%.

Gary's Florist
CVP Income Statement
For the Year Ending December 31, 2017
			Total		Per Unit
Sales Revenue
Variable Costs
Contribution Margin
Fixed Costs
Net Income
Units Sold:

Answer 1

	Breakeven Units Sales
	BEP Units = Fixed Cost/Contribution Per Unit
		=151875/9
		=16875 units
	Suppose sale units are x then
	Sale = Variable Cost + Fixed Cost + Profit
	40x = 31x+ 151875 + 72000
	40x-31x = 221875
	X = 221875/9
	X = 24653 Units Approx.
	Gary's Florist
	CVP Income Statement
	For the Year Ending December 31, 2017
				Total		Per Unit
	Sales Revenue			1060079		43
	Variable Costs			690284		28
	Contribution Margin			369795		15
	Fixed Costs			150000
	Net Income			219795
	Units Sold:			24653