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CVP Analysis for a nonprofit, Mount Company, and Blank Co

1. A nonprofit organization aids the unemployed by supplementing their incomes by $3,200 annually, while they seek new employment skills. The organization has fixed cost of $240,000 and the budgeted appropriation for the year totals $800,000. How many individuals can receive financial assistance this year?

2. Mount Company sells only two products - A and B
Selling price - Product A-$40, Product B-$50
Variable cost per unit - Product A-$24, Product B-$40
Total fixed cost is $840,000.
Mount sells two units of Product A for each unit it sells of Product B. Mount faces a tax rate of 30%. Mount desires a net after-tax income of $73,500.What the breakeven point in units would be?

3.Blank Co sells a single product. The company's most recent income statement is given below.
Sales $200,000
Less variable expenses ($120,000)
Contribution margin $80,000
Less fixed expenses $(50,000)
Net Income $30,000
Required:
a. Contribution margin ratio is ......
b. Breakeven point in total sales dollars is ...
c. To achieve $40,000 in net income, sales must total .....
d. If sales increase by $50,000, net income will increase by .....

Solution Preview

1. A nonprofit organization aids the unemployed by supplementing their incomes by $3,200 annually, while they seek new employment skills. The organization has fixed cost of $240,000 and the budgeted appropriation for the year totals $800,000. How many individuals can receive financial assistance this year?

(800,000 - 240,000)/3,200 = 175 individuals

2. Mount Company sells only two products - A and B
Selling price - Product A-$40, Product B-$50
Variable cost per unit - Product ...

Solution Summary

This solution is comprised of a detailed explanation to determine the breakeven sales units, the breakeven sales dollars, and sales units required to achieve certain amount of net income.

$2.19