Basic Cvp Analysis

1. 1. Calculate the annual break- stock-still point in clam gross revenue and in unit sales for Shop 48. whole CM= Selling price per unit uncertain expenses per unit = $30 - $18= $12 CM ratio= unit contribution valuation account/ sell price = $12/$30 = 0.4 unit sales to break eve= posit 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 dough operate income or sledding? bestow Sales = 12000 * $30 = $360,000 in sales inconsistent Expenses = 12000 * $18 = $216,000 Annual Total Sales ---------------------------------------$360,000 Variable Expenses ------------------------------ $216,000 persona Margin ----------------------------$144,000 Total hardened Expenses ---------------------------$150,000 Net operational privation ------------------------------- ($ 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 pull out 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 expenses/ CM ratio = $150000/0.375 = $400,000 in sales 5. Refer to the buffer data. As an alternate(a) to (4) abov! e, the company is considering paying the store manager 50 cents commission on each pair of shoes change 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 exchange? Total Sales = 15000 * $30 = $450,000 Variable Expenses = 12500 * $18 + 2500...If you motive to build up a full essay, order it on our website: OrderEssay.net

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