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CVP_Analysis(2) & Ratios Excel

# CVP_Analysis(2) & Ratios Excel - Units Sales Less...

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Units \$ % Sales 1000 \$20.00 Less Variable Cost 1000 \$12.00 = Contribution Margin \$8,000.00 40% Less Fixed Cost \$1,000.00 = Net Income 1. Clark Company produces flash drives for computers, which it sells for \$20 each. Each flash drive costs \$12 of variable costs to make. During April, 1,000 drives were sold. Fixed costs for March were \$2 per unit for a total of \$1,000 for the month. How much is the contribution margin ratio? Sales \$20,000.00 CM = Sales - Variable Costs CM Ratio = CM/Sales Variable Costs \$12,000.00 \$8,000.00 8000/20000 40 Units \$ % Sales \$1,250,000.00 Less Variable Cost \$750,000.00 = Contribution Margin \$500,000.00 40% Less Fixed Cost = Net Income 2. If a company had a contribution margin of \$500,000 and a contribution margin ratio of 40%, total variable costs must have been CM Ratio = CM/Sales Variable Costs = Sales - CM 0.4 = 500000/Sales 1250000 - 500000 0.4 = 500000/Sales * Sales/1 750000 Sales/1 * 0.4 = 500000 Sales *0.4 = 500000 Sales = 500000/0.4 Sales = 1250000

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Units \$ % Sales \$40,000.00 Less Variable Cost \$12,000.00 30% = Contribution Margin \$28,000.00 70% Less Fixed Cost \$22,000.00 = Net Income \$6,000.00 3. Disney’s variable costs are 30% of sales. The company is contemplating an advertising campaign that will cost \$22,000. If sales are expected to increase \$40,000, by how much will the company's net income increase? VC = Sales * 30% CM = Sales - VC Net Income = CM-FC 12,000 40000 - 12000 28000 - 22000 28000 6000 Units \$ % Sales 200000 \$2,000,000.00 Less Variable Cost \$700,000.00 = Contribution Margin \$1,300,000.00 Less Fixed Cost \$1,000,000.00 = Net Income 4. A division sold 200,000 calculators during 2008: Sales \$2,000,000 CM = Sales - VC Variable costs: 2000000 - 700000 Materials \$380,000 1300000 Order processing \$150,000 Billing labor \$110,000 CM per unit = CM/200000 calculators \$60,000 1300000/200000 Total variable costs \$700,000 6.5 Fixed costs \$1,000,000 Selling expenses
Units \$ % Sales \$1,200,000.00 Less Variable Cost \$900,000.00 75% = Contribution Margin \$300,000.00 25% Less Fixed Cost \$300,000.00 = Net Income 5. Fixed costs are \$300,000 and the variable costs are 75% of the unit selling price. What is the break-even point in dollars? BEP\$ = Fixed Cost/CM Ratio 25% of the sales = FC 75% of the sales = VC 300000/0.25 25% of the sales = 300,000 1200000 Sales = 300,000/0.25 1200000 (.75) = VC Sales = 1,200,000 900000 = VC CM Ratio = CM/Sales 300000/1200000 0.25 Units \$ % Sales Less Variable Cost = Contribution Margin 10000 \$150.00 Less Fixed Cost \$1,500,000.00 = Net Income 6. Fixed costs are \$1,500,000 and the contribution margin per unit is \$150. What is the break-even point? BEPunit = Fixed Cost/CM Unit

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CVP_Analysis(2) & Ratios Excel - Units Sales Less...

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