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    contribution margin, contribution margin ratio break-even units and break-even dollars

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    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

    Proposal A Proposal B Proposal C
    Selling Price $99 $129 $99
    Variable Cost $55 $55 $49
    Contribution Margin
    Contribution Margin Ratio

    Fixed Cost $110,000 $110,000 $110,000

    Break-Even In Units

    Break-Even In Dollars

    1. What are the break-even points in units and dollars under proposal A?

    2. How did the increased selling price under proposal B impact the break-even points in units and dollars compared to the break-even points calculated under proposal A?

    3. Why did the change in variable cost under proposal C not impact the break-even points in units and dollars as significantly as proposal B did?

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    Please see the attached excel file.

    Decision Guideline Phonetronix (CVP) Analysis 3-Jul-11

    Proposal A Proposal B Proposal C
    Selling Price $99 $129 $99
    Variable Cost $55 $55 $49
    Contribution Margin $44 $74 $50
    ...

    Solution Summary

    This solution carefully assesses contribution margin, contribution margin ratio break-even units, and break-even dollars in the given problem.

    $2.49

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