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    C-V-P analysis

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    Iron Decor manufactures decorative iron railings. In preparing for the next years operations, management has developed the following estimates:

    Total Per Unit

    Sales (20,000 units)................................1,000,000 50.00
    Direct Materials.........................................200,000 10.00
    Direct Labor(variable).................................50,000 2.50

    Factory Overhead:
    Variable.............................................70,000 3.50
    Fixed................................................80,000 4.00

    Selling and administrative:
    Variable.............................................100,000 5.00
    Fixed.................................................30,000 1.50

    A. Compute the Unit Contribution Margin
    B. Compute Contribution Margin Ratio
    C. Compute Break-Even in sales dollars
    D. If the sales volume increases by 20% with no change in total fixed expenses, what will be the change in net operating income?
    E. If the per unit variable production cost increase by 15%, and if the fixed selling and administrative expenses increase by 12%, what will be the new break-even point in sales dollars?

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    https://brainmass.com/business/accounting/c-v-p-analysis-84209

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    Word file contains computation of the Unit Contribution Margin, Contribution Margin Ratio and Break-Even in sales dollars

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