Question

Base CVP Scenario - Base ALL OTHER Calculations from this set of numbers!
	Total	Per unit	Ratio %
Sales (20,000 )	$800,000	$40.00	100.00%
Variable expenses	500,000	25.00	62.50%
Contribution margin	300,000	$15.00	37.50%
Fixed expenses	125,000
Net operating income	$175,000
(A)
Determine the break-even point in sales units
Break Even (Units)                                Formula =	______________
(B)
Sales volume increases by 60% and the selling price decreases by $6.00 per unit.
	Dollars	Per Unit	% Ratio
Sales (__________)
Variable expenses
Contribution margin
Fixed expenses
Net operating income
(C)
Selling price decreases by $8.00 per unit, fixed expenses increase by $90,000,
and the sales volume increases by 90%.
	Dollars	Per Unit	% Ratio
Sales (__________)
Variable expenses
Contribution margin
Fixed expenses
Net operating income
(D)
Selling price increases by 40%, variable expense increases by $5.00 per unit
Sales volume decreases by 10%
	Dollars	Per Unit	% Ratio
Sales (__________)
Variable expenses
Contribution margin
Fixed expenses
Net operating income

Answer 1

Total Per Unit Ratio% ABreak Even (Units) = Fixed Expenses/Contribution Margin per unit $125,000/S15 per unit 8333 units B Sales volume increases by 60 % and the selling price decreases by $6.00 per unit Ratio % 100% 74 % Dollars Per Unit Sales (20000 x 1.6 x $34) Varlable Expenses Contribution Margin Fixed Expenses Net Operating Income $ 1,088,000 34 $ $ 800,000 $ 25 9 288,000 $ 26% $ 125,000 163,000 Selling price decreases by s8.00 per unit, fixed expenses increase by $90,000 and the sales volume increases by 90 % Ratio % 100% 78% Dollars Per Unit Sales (20000 x 1.9 x $32) Variable Expenses Contribution Margin Fixed Expenses Net Operating Income $ $ 1,216,000 32 $ 950,000 $ 25 $ 266,000 $ 7 22% $ 215,000 51,000 Selling price increases by 40 % , variable expense increases by S5.00 per unit Sales volume decreases by 10% D Ratio % Dollars Per Unit Sales (20000 x 0.9 x $56) Variable Expenses Contribution Margin Fixed Expenses Net Operating Income $ $ 1,008,000 56 100% 540,000 468,000 $ 30 54% $ 26 46% $ 125,000 $ 343,000