Given for one of the products of Juarez Co. Sales price per product unit Variable expenses per product unit Total fixed expenses per month a. Contribution margin per product unit b. Break-even sales in units per month c. Sales in units that will produce a net income of $9,000 per month d. Sales in units that will produce a net income of 20% of sales per month e. Net income if 2,500 product units are sold per month $ f. The break-even sales in units if variable expenses are decreased by $3 per unit and if total fixed expenses are increased by $9,000 per month g. If the company desires a net income of $15,000 on a sales volume of 5,000 units per month, what must the unit selling price be, assuming no changes in the $35 variable expenses per unit or the $27,000 total fixed expenses? $50 $35 $27,000 units units units units
Cost-Volume-Profit Analysis
Cost Volume Profit (CVP) analysis is a cost accounting method that analyses the effect of fluctuating cost and volume on the operating profit. Also known as break-even analysis, CVP determines the break-even point for varying volumes of sales and cost structures. This information helps the managers make economic decisions on a short-term basis. CVP analysis is based on many assumptions. Sales price, variable costs, and fixed costs per unit are assumed to be constant. The analysis also assumes that all units produced are sold and costs get impacted due to changes in activities. All costs incurred by the company like administrative, manufacturing, and selling costs are identified as either fixed or variable.
Marginal Costing
Marginal cost is defined as the change in the total cost which takes place when one additional unit of a product is manufactured. The marginal cost is influenced only by the variations which generally occur in the variable costs because the fixed costs remain the same irrespective of the output produced. The concept of marginal cost is used for product pricing when the customers want the lowest possible price for a certain number of orders. There is no accounting entry for marginal cost and it is only used by the management for taking effective decisions.
Step by step
Solved in 2 steps
Could you please finish the remaining questions?
by Bartleby Expert
