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# Cost Volume Profit Analysis

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A company sells calculators at \$27 each. It has monthly fixed costs of \$3800 each and material costs \$3 per unit, labour costs of \$1 per unit, and other variable costs \$10 per unit.

1. What is the breakeven point in sales dollars?
2. What is net income at a level of sales of 350 units?
3. How many units must they sell to earn a monthly profit of \$600?
4. What are total costs at breakeven?
5. What are total costs at a sales level of 450 units?

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## SOLUTION This solution is FREE courtesy of BrainMass!

Variable Cost = Material Cost + Labor + other Variable cost

Variable Cost =3+1+10 = 14

Contribution per unit = Sale price - variable cost = 27 - 14 = \$13

Breakeven Point (units) = Fixed Cost / Contribution per unit = 3800/13 = 293

1. Breakeven in \$ = 293 * 27 = \$7911

2. Contribution at 350 units = 350*13 = \$4550
Net Income = Contribution - Fixed Cost = 4550 - 3800 =\$750

3. Required Contribution = Fixed Cost + Required Profit = 3800+600 = 4400
Breakeven Point = 4400 / 13 = 339

4. Total Cost = Variable Cost + Fixed Cost
Breakeven units = 293
Total Cost = 293*14 + 3800 = \$7,902

5. Total Cost = 450*14 + 3800 = \$10,100.

This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

© BrainMass Inc. brainmass.com October 2, 2022, 11:22 am ad1c9bdddf>