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    Accounting: C-V-P analysis and Break-even.

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    Proposal A Proposal B Proposal C
    Selling Price $99 $129 $99
    Variable Costs 55 55 49
    Contribution Margin
    Contribution Margin Ratio

    Fixed Costs $110,000 $110,000 $110,000

    Break-even in Units

    Break Even in Dollars

    1. What are the break-even points in units and dollars under proposal A?

    2. How did the increased selling price under proposal B impact the break-even points in units and dollars compared to the break-even points calculated under proposal A?

    3. Why did the change in variable cost under proposal C not impact the break-even points in units and dollars as significantly as proposal B did?

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    Solution Summary

    The problem deals with determining the different profits associated with production volume. It also deals with determining the break-even level with selected information.