Conduct the CVP analysis for your business for the upcoming five years. Specifically, you need to do the following: 3.1 Calculate how many units of your product you will need to sell to break even in each of the upcoming five years. Fixed cost $120,000, Variable costs per unit $60, Sales price per unit $100 3.2 Calculate the margin of safety in units for each of the upcoming five years. 3.3 Decide how much you would like to make in before-tax operating income (target profit) in each of the upcoming five years. Calculate how many units you would need to sell in each of the upcoming years to meet those target profit levels.
Conduct the CVP analysis for your business for the upcoming five years. Specifically, you need to do the following: 3.1 Calculate how many units of your product you will need to sell to break even in each of the upcoming five years. Fixed cost $120,000, Variable costs per unit $60, Sales price per unit $100 3.2 Calculate the margin of safety in units for each of the upcoming five years. 3.3 Decide how much you would like to make in before-tax operating income (target profit) in each of the upcoming five years. Calculate how many units you would need to sell in each of the upcoming years to meet those target profit levels.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Conduct the CVP analysis for your business for the upcoming five years. Specifically, you need to do the following:
3.1 Calculate how many units of your product you will need to sell to break even in each of the upcoming five years.
Fixed cost $120,000, Variable costs per unit $60, Sales price per unit $100
3.2 Calculate the margin of safety in units for each of the upcoming five years.
3.3 Decide how much you would like to make in before-tax operating income (target profit) in each of the upcoming five years. Calculate how many units you would need to sell in each of the upcoming years to meet those target profit levels.
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