Using sensitivity analysis Mi Tierra Driving School charges $680 per student to prepare and administer written and driving tests. Variables 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 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: Breakeven point with no change in information. Decrease sales price to $544 per student. Decrease variable costs to $340 per strident Decrease fixed costs to $53,040. 2. Compare the impact of changes in the sales price, variable costs and fixed costs on the contribution margin per unit and the breakeven point in units.
Using sensitivity analysis Mi Tierra Driving School charges $680 per student to prepare and administer written and driving tests. Variables 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 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: Breakeven point with no change in information. Decrease sales price to $544 per student. Decrease variable costs to $340 per strident Decrease fixed costs to $53,040. 2. Compare the impact of changes in the sales price, variable costs and fixed costs on the contribution margin per unit and the breakeven point in units.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Using sensitivity analysis
Mi Tierra Driving School charges $680 per student to prepare and administer written and driving tests. Variables 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
- 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:
- Breakeven point with no change in information.
- Decrease sales price to $544 per student.
- Decrease variable costs to $340 per strident
- Decrease fixed costs to $53,040.
2. Compare the impact of changes in the sales price, variable costs and fixed costs on the contribution margin per unit and the breakeven point in units.
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