Cost Chapter 3

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

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
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
Background image of page 1

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

View Full DocumentRight Arrow Icon
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.
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 12

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

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online