Digital portfolio Template

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

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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? 2. How would increasing the sale price to $125 affect the break-even point?
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Digital portfolio Template - PROBLEM: HOW TO DETERMINE THE...

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