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# CVP Analysis-Break even sales

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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: Selling price per unit, \$30; total fixed expenses, \$33,000; variable expenses per unit, \$14. Find total sales in units to achieve a profit of \$7,000, assuming no change in selling price.

4. Given: Sales, \$50,000; variable expenses, \$20,000; fixed expenses, \$20,000; net income, \$10,000. Assume no change in selling price; find net income if activity volume increases 10%.

5. Given: Selling price per unit, \$40; total fixed expenses, \$80,000; variable expenses per unit, \$30. Assume that variable expenses are reduced by 20% per unit, and the total fixed expenses are increased by 10%. Find the sales in units to achieve a profit of \$20,000, assuming no change in selling price.

#### Solution Preview

Solution

1. Given: Selling price per unit, \$20; total fixed expenses, \$5,000; variable expenses per unit, \$15. Find break-even sales in units.

Contribution margin per unit = Selling Price - Variable Cost per unit
=20-15
=\$5
Break even Sales in units = Fixed Costs/contribution margin per unit
=5000/5
= 1000 units

2. Given: Sales, \$40,000; variable expenses, \$30,000; fixed expenses, \$7,500; net income, \$2,500. Find break-even sales in dollars. ...

#### Solution Summary

There are five problems related to CVP analysis. Solutions describes the steps to determine sales required to break even and meet the targetted profit.

\$2.19