{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Digital portfolio Template

# Digital portfolio Template - PROBLEM HOW TO DETERMINE THE...

This preview shows pages 1–2. Sign up to view the full content.

PROBLEM: HOW TO DETERMINE THE BREAK-EVEN POINT AND CONTRIBUTION MARGIN FOR NEW PRODUCT, WITH VARIATIONS IN FIXED AND VARIABLE COSTS PER UNIT. REQUIRED BUSINESS SKILLS : BREAK-EVEN ANALYSIS REQUIRED SOFTWARE SKILLS : SPREADSHEET FORMULAS, CREATING A TWO-VARIABLE DATA TABLE PROJECT NAME: PERFORMING BREAK-EVEN ANALYSIS AND SENSITIVITY The break-even/sensitivity analysis will provide Selmore Collectible Toy Company (SCTC) with useful information about a new product’s profitability. The break-even point spreadsheet analysis determines SCTC’s fixed and variable cost per unit. In addition, there is a calculation of the contribution margin (sale price-total variable costs/unit), which is needed to find the final break-even point. This analysis predicts the sales volume level needed in order to make a profit. The analysis helps the company understand how relationships between fixed costs, variable costs, and the break-even point will affect the business. The analysis presents important information, such as: price level and its sensitivity, combinations of variable and fixed costs, and various strategic financial options for the company. Questions that were considered and answered include: 1. How many sets does SCTC have to sell before it can start turning a profit?

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

### Page1 / 2

Digital portfolio Template - PROBLEM HOW TO DETERMINE THE...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document
Ask a homework question - tutors are online