Chapter 8: Cost-Volume-Profit Relationships

Case Study/Exercise: Grünberg Lehrmittelverlag GmbH

Grünberg Lehrmittelverlag GmbH manufactures and sells pens. Present
sales output is 5 million annually at a selling price of €0.50 per unit. Fixed
costs are €900,000 per year. Variable costs are €0.30 per unit.

Task:

Calculate the following operating profits/breakeven points:

1.a) What is the present operating profit for a year? Fachbereich Elektrische
Energietechnik
b) What is the present breakeven point (in revenues)?
Prof. Dr. Valerie Wulfhorst

Betriebswirtschaftslehre,
Calculate the new operating profit for each of the following changes:
insb. Controlling

2. A €0.04 per unit increase in variable costs. Telefon

02921 378-451
3. A 10% increase in fixed costs and a 10% increase in units sold. Telefax
02921 378-409
4. A 20% decrease in fixed costs, a 20% decrease in selling price, a 10% E-Mail
decrease in variable costs per unit, and a 40% increase in units sold. v.wulfhorst@fh-swf.de

Standort Soest
Calculate the new breakeven point in units for each of the following Lübecker Ring 2
changes: 59494 Soest

5. A 10% increase in fixed costs.

6. A 10% increase in selling price and a €20,000 increase in fixed costs.

7. Assume a price increase of 10% and a 10% increase in variable costs.

What is the minimum output level, if Grünberg wants to reach a target op- Fachhochschule
Südwestfalen
erating profit of €200,000?
Sitz: Iserlohn

Hagen
Iserlohn
Meschede
Hint: Derive general formulas for operating profit and the breakeven output
Soest
that you can re-use for each task. Using Excel reduces calculation mis-
takes and speeds up calculations! www.fh-swf.de

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