Basic Cvp Analysis

1. 1. Calculate the annual break- stock-still point in dollar sales and in building block sales for Shop 48. whole of measurement CM= Selling price per unit unsettled expenses per unit = $30 - $18= $12 CM symmetry= unit contribution valuation account/ sell price = $12/$30 = 0.4 building block sales to break eve= ameliorate Expenses/Unit CM = $150000/$12 = 12,500 pairs of shoes Dollar sales to break even= stiff expenses/ CM ratio = $150000/0.4 = $375,000 in sales 3. If 12,000 pairs of shoes are change in a year, what would be Shop 48s profit operate income or departure? bestow Sales = 12000 * $30 = $360,000 in sales unsettled Expenses = 12000 * $18 = $216,000 Annual Total Sales ---------------------------------------$360,000 Variable Expenses ------------------------------ $216,000 section Margin ----------------------------$144,000 Total fix Expenses ---------------------------$150,00 0 Net operational passing game ------------------------------- ($ 6,000) 4. The company is considering paying the store manager of Shop 48 an incentive focussing of Shop 48 an incentive guidance of 75 cents per pair of shoes (in addition to the salespersons commission). If this change is made, what commit up stakes be the new break-even point in dollar sales and in unit sales? Now, Variable Expenses = $18.

75 Thus, Unit CM= $30 - $18.75 = $ 11.25 CM ratio= unit contribution margin/selling price = 0.375 Unit sales to break even= Fixed Expenses/Unit CM 13,3333 pairs of shoes Dollar sales to break even= Fixed expense s/ CM ratio = $150000/0.375 ! = $400,000 in sales 5. Refer to the pilot data. As an alternate(a) to (4) above, the company is considering paying the store manager 50 cents commission on each pair of shoes exchange in excess of the break-even point. If this change is made, what will be the shops net operating income or loss if 15,000 pairs of shoes are change? Total Sales = 15000 * $30 = $450,000 Variable Expenses = 12500 * $18 + 2500...If you neediness to build up a full essay, order it on our website: BestEssayCheap.com

If you want to get a full essay, visit our page: cheap essay