E-M:4-41 Using sensitivity analysis (Learning Objective 4) Mi Tierra Driving School charges $680 per student to prepare and administer written and driving tests. Variable costs of $408 per student include trainers' wages, study materials, and gasoline. Annual fixed costs of $63,920 include the training facility and fleet of cars. Requirements 1. For each of the following independent situations, calculate the contribution margin per unit and the breakeven point in units by first referring to the original data provided: a. Breakeven point with no change in information. b. Decrease sales price to $544 per student. c. Decrease variable costs to $340 per student. d. Decrease fixed costs to $53,040.
E-M:4-41 Using sensitivity analysis (Learning Objective 4) Mi Tierra Driving School charges $680 per student to prepare and administer written and driving tests. Variable costs of $408 per student include trainers' wages, study materials, and gasoline. Annual fixed costs of $63,920 include the training facility and fleet of cars. Requirements 1. For each of the following independent situations, calculate the contribution margin per unit and the breakeven point in units by first referring to the original data provided: a. Breakeven point with no change in information. b. Decrease sales price to $544 per student. c. Decrease variable costs to $340 per student. d. Decrease fixed costs to $53,040.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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Transcribed Image Text:E-M:4-41 Using sensitivity analysis (Learning Objective 4)
Mi Tierra Driving School charges $680 per student to prepare and administer written and driving
tests. Variable costs of $408 per student include trainers' wages, study materials, and gasoline.
Annual fixed costs of $63,920 include the training facility and fleet of cars.
Requirements
1. For each of the following independent situations, calculate the contribution margin per unit
and the breakeven point in units by first referring to the original data provided:
a. Breakeven point with no change in information.
b. Decrease sales price to $544 per student.
c. Decrease variable costs to $340 per student.
d. Decrease fixed costs to $53,040.
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