Problem:
Chapter: Decision Guidline
Phonetronix
Cost-Volulme-Profit (CV) Analysis
29-06-10
|
Proposal A |
Proposal B |
Proposal C |
| Selling Price |
$99 |
$129 |
$99 |
| Variable Costs |
55 |
55 |
49 |
| Contribution Margin |
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|
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| Contribution Margin Ratio |
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|
|
| Fixed Costs |
$110,000 |
$110,000 |
$110,000 |
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| Break-even in Units |
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| Break Even in Dollars |
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Calculate the areas in yellow
When you have completed your spreadsheet, answer the following questions:
Question 1. What are the break-even points in units and dollars under proposal A?
Question 2. How did the increased selling price under proposal B impact the break-even points in units and dollars compared to the break-even points calculated under proposal A?
Question 3. Why did the change in variable cost under proposal C not impact the break-even points in units and dollars as significantly as proposal B did?