3100 LS Midterm 2
CVP analysis focuses on how profits are affected by:
sales volume selling price unit variable cost total fixed costs mix of products sold
Sold 300 mugs last year for $20 each. VC were $7 per mug and total FC were $1,700. Mugs profit was:
2,200 profit= 300x(20-7)-1700
run like the wind sells ceiling fans. Target profit is $470,000. If each fans contribution margin is $32 and fixed costs are $222,640, the number of fans required to meet the companys goal is:
21,645 Sales volume= (470,000+222,640)/32
Blankets target profit is $520,000. Each blanket has a contribution margin of $21. Fized costs are $320,000. The number of blankets they need to sell to achieve target profits?
40,000 520,000+320,000/21
CVP
Cost volume profit
At break even point:
total revenue - total costs net operating income is 0
Variable Expenses/sales is the calc of the ___ ____ ratio.
variable expense
Petes Putters sells each putter for $125. The vc IS $60 per putter and FC total $400,000. Based on this information
sale of 12,000 putters results in NI of $380,000 contribution margin per putter is $65
order in which sales dollars are applied on a contribution margin income statement
VC FE NI
A company sold 20,000 units of its product at a selling price of $20. The VC per unit is $11. Fixed expenses total $150,000. The company's contribution margin is:
contribution margin= 20,000x(20-11) $180,000