Chapter 3 Templates

# Chapter 3 Templates - CVP example on pgs 87 89 Price per...

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CVP example on pgs. 87 - 89 Price per unit P \$ 0.70 Variable costs per unit V \$ 0.36 Units produced X 10,000 units Fixed costs F \$ 1,500.00 Target profit TP \$ 1,800.00 Total sales P * X \$ 7,000.00 Total variable costs V * X \$ 3,600.00 Contribution margin per unit P - V \$ 0.34 Total contribution margin (P - V)X \$ 3,400.00 Profit equation (P - V)X - F \$ 1,900.00 Break-even in units F / (P - V) 4,412 units Contribution margin ratio (P - V) / P 48.57% Break-even in sales dollars F / ((P - V) / P) \$ 3,088.24 Target volume in units (F + TP) / (P - V) 9,706 units Target volume in sales dollars (F + TP) / ((P - V) / P) \$ 6,794.12

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Price per unit P \$ 18.00 Variable costs per unit V \$ 10.00 Units produced X units Fixed costs F \$ 20,000.00 Target profit TP \$ 23,076.92 After tax: TP / ( Total sales P * X \$ - Total variable costs V * X \$ - Contribution margin per unit P - V \$ 8.00 Total contribution margin (P - V)X \$ - Profit equation (P - V)X - F \$ (20,000.00) Break-even in units F / (P - V) 2,500 units Contribution margin ratio (P - V) / P 44.44% Break-even in sales dollars F / ((P - V) / P) \$ 45,000.00 Target volume in units (F + TP) / (P - V) 5,385 units Target volume in sales dollars (F + TP) / ((P - V) / P) \$ 96,923.07 Cambridge, Inc. is considering the introduction of a new calculator with the following price and
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