1. The break even or cost volume profit (CVP) model is based on a number of assumptions. Discuss these assumptions and whether or not they are correct in the real world. Finally, discuss how CVP analysis can be useful in planning.
2. Describe the advantages and disadvantages of budgeting

** Please see the attached file for an Excel formatted copy of the problem description **
Calculate contribution margin, contribution margin ratio break-even units and break-even dollars, and answer the following:
Decision Guideline Phonetronix (CVP) Analysis 3-Jul-11
Proposa

See pdf
Question 5:
Exercise 5-14: CVP analysis using composite units L.O. P4
Handy Home sells windows and doors in the ratio of 7:1 (windows:doors). The selling price of each window is
$90 and of each door is $240. The variable cost of a window is $62 and of a door is $174. Fixed costs are
$460,000.
Use this infor

Each problem is unrelated to the others.
1. Given: Selling price per unit, $20; total fixed expenses, $5,000; variable expenses per unit, $15. Find break-even sales in units.
2. Given: Sales, $40,000; variable expenses, $30,000; fixed expenses, $7,500; net income, $2,500. Find break-even sales in dollars.
3. Given: Se

1. How should mixed costs be classified in CVP analysis? What approach is used to effect the appropriate classification?
2. "Cost-volume-profit (CVP) analysis is based entirely on unit costs." Do you agree? Explain.
3. Linda Fearn asks your help in constructing a CVP graph. Explain to Linda (a) how the break-even point is

Gabby's Wedding Cakes creates elaborate wedding cakes.Each
cake sells for $600.The variable cost of making the cakes is $250,and the fixed cost per month is $7,700.
Required
a. Calculate the break-even point for a month in units.
b. How many cakes must be sold to earn a monthly profit of $10,000?

Innovators Inc. produces two products, A and B, with the following characteristics:
Product A Product B
Selling price per unit $10 $15
Variable cost per unit $ 8 $10
Expected sales (units) 10,000 5,000
Total fixed costs for the company are $21,000.
A. What is the anticipated profit given the expected sales volume ?

The following monthly data in contribution format are available for the MN Company and its only product, Product SD:
Total Per Unit
Sales $83,700 $279
Variable expenses 32,700 109
Contribution margin 51,000 $170
Fixed expenses 40,000
Net operating income $11,

Green Shades Inc. (GSI) sells hammocks; variable costs are $75 each, and the hammocks are sold for
$125 each. GSI incurs $250,000 of fixed operating expenses annually.
Required
a. Determine the sales volume in units and dollars required to attain a $50,000 profit. Verify your answer
by preparing an income statement using