Scenario: Sure Corporation has collected the following information after its first year of sales. Net sales were $1,600,000 on 100,000 units; selling expenses $240,000 (40% variable and 60% fixed); direct materials $511,000; direct labor $285,000; administrative expenses $280,000 (20% variable and 80% fixed); manufacturing overhead $360,000 (70% variable and 30% fixed). Top management has asked you to do a CVP analysis so that it can make plans for the coming year. It has projected that unit sales will increase by 10% next year.

Instructions:
A) Compute (1) the contribution margin for the current year and the projected year, and (2) the fixed costs for the current year (assume that fixed costs will remain the same in the projected year).

B) Compute the break-even point in units and sales dollars for the current year.

C) The company has a target net income of $310,000. What is the required sales in dollar's for the company to meet its target?

D) If the company meets its target net income number, by what percentage could its sales fall before it is operating at a loss? That is, what is its margin of safety ratio?

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This solution computes the contribution margin, breakeven point, and margin of safety for Sure Corporation. This solution is provided in an Excel document which is attached.

Cost Volume profit
Orange Hot Berhad produces and sells an average of 200,000 bottles of Orange Hot Chilli Sauce each month. The following costs were available:
RM
Selling price per bottle 2.00
Variable costs per bottle:
Materials and labour 0.80
Selling and distribution 0.40
Fixed monthly costs:
R

I need with this questions.
For what is cost-volume-profit (CVP) analysis used? What are some of the key underlying assumptions that make CVP analysis useful for decision makers? Why might decision makers use CVP analysis?
I need a word count of 200
Thank you,

Discuss:
â?¢What are the features of cost-volume profit (CVP) analysis.
â?¢Why are managers interested in the break-even analysis point?
â?¢Compare contribution margin and fixed costs.

When conducting a CVP analysis how it can be helpful in organizational development? How does this tool help you determine pricing and R&D budgets? Consider the concepts of Market Saturation, price elasticity and price-demand relationships.

CVP Analysis
Single-Product:
Ellson Electronics Company
Ellson Electronics Company manufactures video cassette recorders, which it sells for $300 per unit. Variable costs are $210 per unit, and fixed costs are $630,000 a year. The tax rate is 40%.
Required:
a. How many VCRs must be sold each year for the firm to br

What is the breakeven point from the given below information?
fixed costs $20,000
variable costs 33% of sales
avg selling price is $10,000
a) As % of sales, what is its variable or contribution margin?
b) If the average sale is $10,000 what is the contribution margin/vehicle?
c

Under the assumptions used in cost-volume-profitanalysis, as volume increases:
A. fixed costs increase in proportion to the increase in volume.
B. variable costs per unit remain the same.
C. fixed costs per unit remain the same.
D. variable costs per unit increase in proportion to the increase in