Breakeven Analysis A. Calculate the breakeven (with profit) volume given the information below. Create an income...

Breakeven Analysis

A. Calculate the breakeven (with profit) volume given the information below. Create an income statement proving your calculated volume produces the desired profit. What will happen to profit if actual volume is 10 cases more than breakeven volume? AVC = $2,500 TFC = $1,200,000 Profit = $100,000 Price = $4,320

B. Calculate breakeven volume if total fixed cost increases by 8%.

C. Calculate breakeven volume if average variable cost increases by 5% with the original (part A) TFC.

Expert Solution

If you find the above solution useful, kindly take a moment to upvote the same. It will help me to serve students better in future.

jeff jeffy answered 1 year ago

2. Cost Volume Profit Analysis or Break Even Analysis You are given the financial information below:...

2. Cost Volume Profit Analysis or Break Even Analysis You are given the financial information below: Tom’s Treasures Income Statement . . .For Year Ended 12/31/17 Sales (85,000 units) . . ... . . .$5,500,000 Variable Expenses . . . . . . .$2,475,000 Contribution Margin . . . . . . . $3,025,000 Fixed Expenses. . . . . . . . . .$1,785.000 Net Operating Income . . . . . . $1,240,000 Additional Formulas Needed: 1. Sales...

What is another term for the cost-volume-profit analysis? ratio analysis liquidity analysis trend analysis breakeven analysis...

What is another term for the cost-volume-profit analysis? ratio analysis liquidity analysis trend analysis breakeven analysis The cost-volume-profit analysis is a ________________ tool, something used by those internal to an organization for budgeting, planning, and decision-making purposes. revenue managerial accounting liquidity traditional financial accounting Sales commission is an example of a fixed cost. True False Utilities are an example of ___________ costs. mixed fixed variable All of the above. Revenues – total variable costs – total fixed costs = _______________....

Cost-volume-profit analysis can be considered a more complex form of breakeven analysis. Which of the following...

Cost-volume-profit analysis can be considered a more complex form of breakeven analysis. Which of the following is an example of this? Question 18 options: Sara realizes she needs to sell 50 cakes a month to cover all of her variable and fixed costs Sara looks at raising the prices of her cakes to see how much more revenue will be generated Sara decides to remove carrot cakes from her menu because they do not sell as well the others Sara...

CHAPTER 7:Cost-volume-profit (CVP) analysis EXPLAIN OR GIVE EXAMPLE OF THE FOLLOWING LO Calculate target income volume...

CHAPTER 7:Cost-volume-profit (CVP) analysis EXPLAIN OR GIVE EXAMPLE OF THE FOLLOWING LO Calculate target income volume and sales revenue [S7-4, P7-63] Compute weighted average contribution margin per unit [S7-7] Calculate margin of safety in units, dollars and percentages [E7-34, P7-63]

. Use the information given below to create the Income Statement, Statement of Changes in Owner’s...

. Use the information given below to create the Income Statement, Statement of Changes in Owner’s Equity and Statement of Financial Position for Mikes Maintenance Company for the year ended Dec. 31 . The balances for the accounts of Mike's Maintenance Co. for the year ended December 31 are as follows. Account $ Account $ A/P 7,000 Wages expense 35,500 A/R 6,500 Rent expense 6,000 Cash 10,500 Supplies 1,200 Land 50,000 Building 125,000 Unearned revenue 4,000 Supplies expense 21,500 Mike’s...

Given the following information on two different firms, (a) calculate the breakeven output of each firm....

Given the following information on two different firms, (a) calculate the breakeven output of each firm. Firm 1 Firm 2 P TFC AVC P TFC AVC $10.00 $50.00 $6.00 $10.00 $100.00 $3.33 Breakeven output Breakeven output Firm 1 = _________ units Firm 2 = _________ units (b) Calculate the degree of operating leverage for each practice at Q = 50 and Q = 80. ...

create an example that illustrates the usefulness of cost-volume-profit analysis for small business owners. In your...

create an example that illustrates the usefulness of cost-volume-profit analysis for small business owners. In your example, ensure that you illustrate calculation of: the contribution margin in dollars, the contribution margin ratio, the break even point in units and dollars, and the margin of safety.

Calculate the economic breakeven dollar volume of revenue for a project requiring an initial investment of...

Calculate the economic breakeven dollar volume of revenue for a project requiring an initial investment of $3,693,130 and providing annual cash flows equal to 15% of revenue minus annual fixed costs of $250,000. None of the initial investment is recoverable. Assume the project will generate these cash flows for 10 years and the discount rate is 10%.

Calculate the breakeven point using the following data. Create a table and graph with the answer...

Calculate the breakeven point using the following data. Create a table and graph with the answer you get. Fixed Costs: App Development Costs: $150,000 Marketing Costs: $72,000 Variable Costs: Average Cost Per Install (CPI) – $2.89 / install Cost Per Action (CPA): Register – $4.58 / install CPA: Register: In-app purchase – $102 / install CPA: Purchase – $40 / install CPA: Subscribe – $87 / install Sales Price: App membership subscription: $10 per person or $5 per student

QUESTION ONE: COST–VOLUME–PROFIT (CVP) ANALYSIS (a) Identify the SIX underlying assumptions of cost–volume–profit (CVP) analysis. (b)...

QUESTION ONE: COST–VOLUME–PROFIT (CVP) ANALYSIS (a) Identify the SIX underlying assumptions of cost–volume–profit (CVP) analysis. (b) Select ANY THREE assumptions given in (a) and discuss the difficulties that could arise in CVP analysis if these assumptions do not hold. QUESTION TWO: PUTTING ACCOUNTING DECISIONS IN CONTEXT (a) Describe TWO financial and TWO non-financial performance indicators which may be useful for users of the reports of a public benefit entity (e.g. a museum). (b) If you were a member of the...

Question