A B C

1
2 CVP
3 Cost-Volume-Profit Analysis
4
5 Data Section
6
7 Fixed Variable
8 Production costs
9 Direct materials $4.30
10 Direct labor 4.70
11 Factory overhead $225,000 3.00
12 Selling expenses
13 Sales salaries & commissions 97,000 0.75
14 Advertising 47,500
15 Miscellaneous selling expense 16,200
16 General expenses
17 Office salaries 87,000
18 Supplies 12,300 1.25
19 Miscellaneous general expense 15,000
20 $500,000 $14.00
21
22 Projected unit sales 90,000
23 Selling price per unit $20.00
24 Target net income $200,000
25
26 Answer Section
27
28 Contribution margin per unit $6.00
29 Contribution margin ratio 30.00%
30
31 Break-even point (units) 83,333
32 Target net income (units needed to achieve) 116,667
33
34 Break-even point (sales dollars) $1,666,667
35 Target net income (sales dollars needed to achieve) $2,333,333
36
37 Projected net income $40,000
38
Units T. Revenue GROWTH REV V. Costs GROWTH V.COST
- 0 0
40,000 800000 560000
80,000 1600000 100% 1120000 100%
120,000 2400000 50% 1680000 50%
160,000 3200000 33% 2240000 33%

3500000

3000000

2500000

2000000

1500000

1000000

500000

0
- 4
 F. Costs T. Costs
$ 500,000 $ 500,000
$ 500,000 $ 1,060,000
$ 500,000 $ 1,620,000
$ 500,000 $ 2,180,000
$ 500,000 $ 2,740,000

BREAKEVEN ANALYSIS
500000

000000

500000

000000
T. Revenue
F. Costs
T. Costs
500000
V. Costs

000000

500000

0
- 40,000 80,000 120,000 160,000
UNIT SALES