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Cost Chapter 3

# Cost Chapter 3 - Dianne Estrada 3-18 CVP analysis changing...

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Dianne Estrada 3-18 CVP analysis, changing revenues and costs. 1. a. Break Even Point Selling Price = 8% x \$1,000 \$80 Variable Cost per Unit = \$35 per ticket \$35 Contribution Margin per Unit = \$80 - \$35 \$45 Fixed Cost = \$22,000 per month \$22,000 Q = Fixed Cost / Contribution Margin per Unit 489 b. Target Operating Income Q = (Fixed Cost + Total Operating Income) / CMU 711 2. a. Break Even Point Selling Price = 8% x \$1,000 \$80 Variable Cost per Unit = \$29 per ticket \$29 Contribution Margin per Unit = \$80 - \$29 \$51 Fixed Cost = \$22,000 per month \$22,000 Q = Fixed Cost / Contribution Margin per Unit 431 b. Target Operating Income Q = (Fixed Cost + Total Operating Income) / CMU 627 3. a. Break Even Point Selling Price = \$48 \$48 Variable Cost per Unit = \$29 per ticket \$29 Contribution Margin per Unit = \$48 - \$29 \$19 Fixed Cost = \$22,000 per month \$22,000 Q = Fixed Cost / Contribution Margin per Unit 1,158 b. Target Operating Income

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Q = (Fixed Cost + Total Operating Income) / CMU 1,684 Reduced commission increases the number of tickets required to sell for the break even point and to attain the target operating income. 4. a. Break Even Point Selling Price = \$48 + \$5 (delivery fee) \$53 Variable Cost per Unit = \$29 per ticket \$29 Contribution Margin per Unit = \$53 - \$29 \$24 Fixed Cost = \$22,000 per month \$22,000 Q = Fixed Cost / Contribution Margin per Unit 917 b. Target Operating Income Q = (Fixed Cost + Total Operating Income) / CMU 1,333 The \$5 delivery fee increases the contribution margin which reduced the number of tickets required to sell for the break even point and to attain the target operating income.
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Cost Chapter 3 - Dianne Estrada 3-18 CVP analysis changing...

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