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    Cost Volume Profit Analysis

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

    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?

    © BrainMass Inc. brainmass.com October 2, 2022, 11:22 am ad1c9bdddf
    https://brainmass.com/business/business-math/cost-volume-profit-analysis-company-selling-calculators-309758

    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>
    https://brainmass.com/business/business-math/cost-volume-profit-analysis-company-selling-calculators-309758

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