Homework: Cost-Volume-Profit Analysis
Complete the "Contribution Margin Analysis" and "Break-Even Analysis".
Overview
The next step in planning for your new business is to analyze the cost behaviors and systems of your industry and conduct the relevant financial calculations to determine appropriate costing solutions. In this milestone homework, you will conduct a break-even analysis to determine your target profits and the selling price you plan to use to achieve these profits for each product.
Prompt
Use information from Milestone One and the provided Milestone Two Market Research Data Appendix Word Document to conduct a cost-volume profit analysis. Complete the "Contribution Margin Analysis" and "Break-Even Analysis" tabs in the Project Workbook Spreadsheet that you used for completing the Milestone One homework.
Specifically, you must address the following rubric criteria:
I. Contribution Margin. Determine your contribution margin per unit in the "Contribution Margin Analysis" tab.
i. Choose a sales price for each product.
ii. Calculate the contribution margin for 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.
II. 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.
i. Determine the break-even points for each product. Show your work using calculations to the side of the table or using appropriate formulas in the table.
ii. Determine break-even units for the suggested target profits for each product. Show your work using calculations to the side of the table or using appropriate formulas in the table.
Format your homework according to the following formatting requirements:
i) The answer should be typed, using Times New Roman font (size 12), double spaced, with one-inch margins on all sides.
ii) The response also includes a cover page containing the title of the homework, the student's name, the course title, and the date. The cover page is not included in the required page length.
iii) Also include a reference page. The Citations and references must follow APA format. The reference page is not included in the required page length.