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
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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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This note was uploaded on 05/15/2011 for the course ACCOUNTING 571 taught by Professor Rosa during the Spring '11 term at Cleveland State.

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

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