Question

Provide sums on cost Volume and profits analysis of Starbucks.
please provide hypothetical sums.

Using MS EXCEL

Answer 1

We are assuming that one type and one size of coffee is sold by Starbucks. The price per cup is $4.50. The variable cost be $1.50 per cup and fixed costs be $15,000 per month.

Cost-Volume Profit (CVP) Analysis
		Units Sold
	Per Unit	4,000	12,000	18,000
Sales Revenue	$4.50	$18,000.00	$54,000.00	$81,000.00
Variable Costs	$1.50	$6,000.00	$18,000.00	$27,000.00
Contribution Margin	$3.00	$12,000.00	$36,000.00	$54,000.00
Fixed Costs		$15,000.00	$15,000.00	$15,000.00
Operating Profit		($3,000.00)	$21,000.00	$39,000.00

Break Even Point (in units) = Fixed Costs/ Contribution Margin per unit

= $15,000/ $3.00

= 5,000 units

At this point of sale, total costs are covered which means total costs are equal to total revenue.

Revenue = 5000 units x $4.50 = $22,500

Costs = 5000 units x $1.50 + $15,000 = $7,500 +$15,000 = $22,500

P/V Ratio = Contribution/ sales

= 12,000/ 18,000 = 66.67%