Question: CVP for a Small Business Form into groups of two to six students. Each group should select a very simple business, one with a single product or one with approximately the same contribution-margin percentage for all products. Some possibilities are A child's lemonade stand A retail DVD rental store An espresso cart A retail store selling compact discs An athletic shoe store A cookie stand in a mall However, you are encouraged to use your imagination rather than just select one of these examples. The following tasks might be split up among the group members:
1. Make a list of all fixed costs associated with running the business you selected. Estimate the amount of each fixed cost per month (or per day or per year, if one of them is more appropriate for your business).
2. Make a list of all variable costs associated with making or obtaining the product or service your company is selling. Estimate the cost per unit for each variable cost.
3. Given the fixed and variable costs you have identified, compute the break-even point for your business in either units or dollar sales.
4. Assess the prospects of your business making a profit.