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