## 2013/02/14

### Basic Cvp Analysis

1. 1. Calculate the annual break- stock-still point in dollar sales and in unit sales for Shop 48.
Unit CM= Selling price per unit Variable expenses per unit
= \$30 - \$18= \$12
CM ratio= unit contribution valuation account/ sell price
= \$12/\$30
= 0.4
Unit sales to break eve= bushel Expenses/Unit CM
= \$150000/\$12
= 12,500 pairs of shoes
Dollar sales to break even= stiff expenses/ CM ratio
= \$150000/0.4
= \$375,000 in sales

3. If 12,000 pairs of shoes are change in a year, what would be Shop 48s net operate income or leaving?
bestow Sales = 12000 * \$30 = \$360,000 in sales
Variable Expenses = 12000 * \$18 = \$216,000
Annual
Total Sales ---------------------------------------\$360,000
Variable Expenses ------------------------------ \$216,000
office Margin ----------------------------\$144,000
Total Fixed Expenses ---------------------------\$150,000
Net operational loss ------------------------------- (\$ 6,000)

4. The company is considering paying the store manager of Shop 48 an incentive guidance of Shop 48 an incentive guidance of 75 cents per pair of shoes (in addition to the salespersons commission). If this change is made, what pull up stakes be the new break-even point in dollar sales and in unit sales?
Now, Variable Expenses = \$18.

75
Thus, Unit CM= \$30 - \$18.75 = \$ 11.25
CM ratio= unit contribution margin/selling price
= 0.375
Unit sales to break even= Fixed Expenses/Unit CM
13,3333 pairs of shoes
Dollar sales to break even= Fixed expenses/ CM ratio
= \$150000/0.375
= \$400,000 in sales
5. Refer to the original data. As an alternate(a) to (4) above, the company is considering paying the store manager 50 cents commission on each pair of shoes sold in excess of the break-even point. If this change is made, what will be the shops net operating income or loss if 15,000 pairs of shoes are sold?
Total Sales = 15000 * \$30 = \$450,000

Variable Expenses = 12500 * \$18 + 2500...If you want to build up a full essay, order it on our website: Orderessay

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