hart included in screenshot as well as prior analysis** CVP analysis is used to analyze the effects of changes in selling prices, costs and volume on profits. It is also used to determine target profit, the margin of safety, operating leverage, product mix and choosing among marketing strategies and others. Suppose Byron management has a target operating income of $3,000. Assume the same costs as above and the sell price remains at $24 per unit. 1. How many units does Byron need to sell to meet this goal? _______ units 2. What is Byron's margin of safety in sales and in units when Byron sells 730 units? Margin of safety in sales $_________ Margin of safety in units ________ units 3. What is the degree of operating leverage when 730 units are sold? If required, round your answer to two decimal places. ___________
Chart included in screenshot as well as prior analysis**
CVP analysis is used to analyze the effects of changes in selling prices, costs and volume on profits. It is also used to determine target profit, the margin of safety, operating leverage, product mix and choosing among marketing strategies and others.
Suppose Byron management has a target operating income of $3,000. Assume the same costs as above and the sell price remains at $24 per unit.
1. How many units does Byron need to sell to meet this goal? _______ units
2. What is Byron's margin of safety in sales and in units when Byron sells 730 units?
Margin of safety in sales $_________ Margin of safety in units ________ units
3. What is the degree of operating leverage when 730 units are sold? If required, round your answer to two decimal places.
___________
![Byron Manufacturing reaches its break-even level of activity when it sells 500
units and generates
$12,000
in revenue, because at this level of activity the firm's revenue equals
its total cost. In
addition, you can determine from the chart that Byron Manufacturing's fixed costs are $6,000
and its
price per unit is $24.00
and variable cost per unit is $12.00
If fixed costs increase, what will happen to the break-even point?
The break-even point will increase.
If the price per unit decreases, what will happen to the break-even point?
The break-even point will increase.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F8bce2d7a-8c6a-4a0f-b029-85d67a63daaf%2F5b048aa0-7c6c-450b-90d3-45c4ec743a21%2Frft9tr_processed.png&w=3840&q=75)
![SALES AND COSTS (Dollars)
20000
Sales
15000
Total Costs
10000
5000
100 200 300 400 500 600 700 800 900 1000
UNITS OF SALES](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F8bce2d7a-8c6a-4a0f-b029-85d67a63daaf%2F5b048aa0-7c6c-450b-90d3-45c4ec743a21%2Flo8apzh_processed.png&w=3840&q=75)
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