Cost Volume Profit (CVP) Relationships (Algo) You are provided with the following data. Unit sales Selling price per unit Variable expenses per unit Fixed expenses Target Profit 80,000 units $70 per unit $28 per unit $ 2,688,000 $ 1,610,000 Required: Compute the CM ratio and variable expense ratio. Compute the break-even. Compute the target profit. Compute the margin of safety with the original data. Compute the degree of operating leverage with the original data. Use the Degree of Operating Leverage to determine the new Net Operating Income if sales increase by: 16% 1. Use the Open Excel in New Tab button to launch this question. 2. When finished in Excel, use the Save and Return to Assignment button in the lower right to return to Connect.
Cost Volume Profit (CVP) Relationships (Algo) You are provided with the following data. Unit sales Selling price per unit Variable expenses per unit Fixed expenses Target Profit 80,000 units $70 per unit $28 per unit $ 2,688,000 $ 1,610,000 Required: Compute the CM ratio and variable expense ratio. Compute the break-even. Compute the target profit. Compute the margin of safety with the original data. Compute the degree of operating leverage with the original data. Use the Degree of Operating Leverage to determine the new Net Operating Income if sales increase by: 16% 1. Use the Open Excel in New Tab button to launch this question. 2. When finished in Excel, use the Save and Return to Assignment button in the lower right to return to Connect.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Cost Volume Profit (CVP) Relationships (Algo)
You are provided with the following data.
Unit sales
Selling price per unit
Variable expenses per unit
Fixed expenses
Target Profit
80,000 units
$70 per unit
$ 28 per unit
$ 2,688,000
$ 1,610,000
Required:
Compute the CM ratio and variable expense ratio.
Compute the break-even.
Compute the target profit.
Compute the margin of safety with the original data.
Compute the degree of operating leverage with the original data.
Use the Degree of Operating Leverage to determine the new Net Operating Income if sales increase by: 16%
1. Use the Open Excel in New Tab button to launch this question.
2. When finished in Excel, use the Save and Return to Assignment button in the lower right to return to Connect.
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