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

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** 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

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

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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
...

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