Cost Volume Profit (CVP) Analysis: The Cost Volume Profit analysis is the analysis of the relation between cost, volume, and profit of a product. It analyzes the cost and profits at the different level of production, in order to determine the breakeven point and required the level of sales to earn the desired profit. Contribution margin means the margin that is left with the company after recovering variable cost out of revenue earned by selling smart phones. The formula for contribution margin is as follows: Contribution margin = Sales - Variable cost. Similarly contribution margin ratio = Contribution/sales Breakeven Point: The Breakeven point is the level of sales at which the net profit is nil. It can be explained as a situation where the business is generating a sale that is equal to the expenses incurred and hence no profits no loss. Breakeven point in units is calculated with the help of following formula: Breakeven point ( units ) = Total Fixed Costs (Sales Price Per unit -Variable Cost per unit) Weighted Average Contribution Margin: Weighted Average Contribution Margin is calculated for two products with the help of following formula: W e i g h t e d A v e r a g e C o n t r i b u t i o n M a r g i n = ( C o n t r i b u t i o n m a r g i n o f P r o d u c t A * W e i g h t o f p r o d u c t A ) + ( C o n t r i b u t i o n m a r g i n o f P r o d u c t B * W e i g h t o f p r o d u c t B ) Requirement-a: To Calculate: The Overall Breakeven Sales unit

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Answer 1

Question

Chapter 11, Problem 11.20E

To determine

Concept Introduction:

Cost Volume Profit (CVP) Analysis:

The Cost Volume Profit analysis is the analysis of the relation between cost, volume, and profit of a product. It analyzes the cost and profits at the different level of production, in order to determine the breakeven point and required the level of sales to earn the desired profit.

Contribution margin means the margin that is left with the company after recovering variable cost out of revenue earned by selling smart phones. The formula for contribution margin is as follows:

Contribution margin = Sales - Variable cost.

Similarly contribution margin ratio = Contribution/sales

Breakeven Point:

The Breakeven point is the level of sales at which the net profit is nil. It can be explained as a situation where the business is generating a sale that is equal to the expenses incurred and hence no profits no loss. Breakeven point in units is calculated with the help of following formula:

Breakeven point (units) = Total Fixed Costs(Sales Price Per unit -Variable Cost per unit)

Weighted Average Contribution Margin:

Weighted Average Contribution Margin is calculated for two products with the help of following formula:

Weighted Average Contribution Margin = (Contribution margin of Product A * Weight of product A) + (Contribution margin of Product B * Weight of product B)

Requirement-a:

To Calculate:

The Overall Breakeven Sales unit

Expert Solution

Answer to Problem 11.20E

The Overall Breakeven Sales unit is 36,000 Units

Explanation of Solution

The Overall Breakeven point in units is calculated as follows:

	Game Players	Tablets	Overall
Unit Selling Price (A)	$ 50	$ 120
Unit Variable Cost (B)	$ 30	$ 80
Unit Contribution Margin (C) =(A-B)	$ 20	$ 40
Sales Mix (D)	70%	30%
Weighted Average Contribution Margin per unit (E) = (C*D)	$ 14	$ 12	$ 26
Total Fixed Cost (F)			$ 936,000
Overall Breakeven point (units) (G) = (F/E)			36,000

To determine

Concept Introduction:

Cost Volume Profit (CVP) Analysis:

The Cost Volume Profit analysis is the analysis of the relation between cost, volume, and profit of a product. It analyzes the cost and profits at the different level of production, in order to determine the breakeven point and required the level of sales to earn the desired profit.

Contribution margin means the margin that is left with the company after recovering variable cost out of revenue earned by selling smart phones. The formula for contribution margin is as follows:

Contribution margin = Sales - Variable cost.

Similarly contribution margin ratio = Contribution/sales

Breakeven Point:

The Breakeven point is the level of sales at which the net profit is nil. It can be explained as a situation where the business is generating a sale that is equal to the expenses incurred and hence no profits no loss. Breakeven point in units is calculated with the help of following formula:

Breakeven point (units) = Total Fixed Costs(Sales Price Per unit -Variable Cost per unit)

Weighted Average Contribution Margin:

Weighted Average Contribution Margin is calculated for two products with the help of following formula:

Weighted Average Contribution Margin = (Contribution margin of Product A * Weight of product A) + (Contribution margin of Product B * Weight of product B)

Requirement-b:

To Calculate:

The Breakeven Sales unit for each product

Expert Solution

Answer to Problem 11.20E

The Breakeven Sales unit for each product is as follows:

	Game Players	Tablets
Breakeven point (units)	25200	10800

Explanation of Solution

The Breakeven Sales unit for each product is calculated as follows:

	Game Players	Tablets	Overall
Unit Selling Price (A)	$ 50	$ 120
Unit Variable Cost (B)	$ 30	$ 80
Unit Contribution Margin (C) =(A-B)	$ 20	$ 40
Sales Mix (D)	70%	30%
Weighted Average Contribution Margin per unit (E) = (C*D)	$ 14	$ 12	$ 26
Total Fixed Cost (F)			$ 936,000
Overall Breakeven point (units) (G) = (F/E)			36,000
*Breakeven point (units) (H) =(GD)**	25200	10800

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Thane Company is interested in establishing the relationship between electricity costs and machine hours. Data have been collected and a regression analysis prepared using Excel. The monthly data and the regression output follow: Month Machine Hours Electricity Costs January 2,000 $ 18,950 February 2,400 22,100 March 1,400 14,050 April 2,600 24,100 May 3,300 28,800 June 2,800 23,100 July 3,600 25,300 August 3,000 23,300 September 1,500 16,600 October 3,200 27,100 November 4,200 32,100 December 3,700 28,300 Summary Output Regression Statistics Multiple R 0.960 R Square 0.921 Adjusted R2 0.913 Standard Error 1,545.17 Observations 12.00 Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Intercept 7,465.99 1,566.61 4.77 0.00 3,975.37 10,956.62 Machine Hours 5.76 0.53 10.78 0.00 4.57 6.95 Based on the results of the regression analysis, the estimate of electricity costs in a month with 1,700 machine hours…

Answer 2

Question

Chapter 11, Problem 11.20E

To determine

Concept Introduction:

Cost Volume Profit (CVP) Analysis:

The Cost Volume Profit analysis is the analysis of the relation between cost, volume, and profit of a product. It analyzes the cost and profits at the different level of production, in order to determine the breakeven point and required the level of sales to earn the desired profit.

Contribution margin means the margin that is left with the company after recovering variable cost out of revenue earned by selling smart phones. The formula for contribution margin is as follows:

Contribution margin = Sales - Variable cost.

Similarly contribution margin ratio = Contribution/sales

Breakeven Point:

The Breakeven point is the level of sales at which the net profit is nil. It can be explained as a situation where the business is generating a sale that is equal to the expenses incurred and hence no profits no loss. Breakeven point in units is calculated with the help of following formula:

Breakeven point (units) = Total Fixed Costs(Sales Price Per unit -Variable Cost per unit)

Weighted Average Contribution Margin:

Weighted Average Contribution Margin is calculated for two products with the help of following formula:

Weighted Average Contribution Margin = (Contribution margin of Product A * Weight of product A) + (Contribution margin of Product B * Weight of product B)

Requirement-a:

To Calculate:

The Overall Breakeven Sales unit

Expert Solution

Answer to Problem 11.20E

The Overall Breakeven Sales unit is 36,000 Units

Explanation of Solution

The Overall Breakeven point in units is calculated as follows:

	Game Players	Tablets	Overall
Unit Selling Price (A)	$ 50	$ 120
Unit Variable Cost (B)	$ 30	$ 80
Unit Contribution Margin (C) =(A-B)	$ 20	$ 40
Sales Mix (D)	70%	30%
Weighted Average Contribution Margin per unit (E) = (C*D)	$ 14	$ 12	$ 26
Total Fixed Cost (F)			$ 936,000
Overall Breakeven point (units) (G) = (F/E)			36,000

To determine

Concept Introduction:

Cost Volume Profit (CVP) Analysis:

The Cost Volume Profit analysis is the analysis of the relation between cost, volume, and profit of a product. It analyzes the cost and profits at the different level of production, in order to determine the breakeven point and required the level of sales to earn the desired profit.

Contribution margin means the margin that is left with the company after recovering variable cost out of revenue earned by selling smart phones. The formula for contribution margin is as follows:

Contribution margin = Sales - Variable cost.

Similarly contribution margin ratio = Contribution/sales

Breakeven Point:

The Breakeven point is the level of sales at which the net profit is nil. It can be explained as a situation where the business is generating a sale that is equal to the expenses incurred and hence no profits no loss. Breakeven point in units is calculated with the help of following formula:

Breakeven point (units) = Total Fixed Costs(Sales Price Per unit -Variable Cost per unit)

Weighted Average Contribution Margin:

Weighted Average Contribution Margin is calculated for two products with the help of following formula:

Weighted Average Contribution Margin = (Contribution margin of Product A * Weight of product A) + (Contribution margin of Product B * Weight of product B)

Requirement-b:

To Calculate:

The Breakeven Sales unit for each product

Expert Solution

Answer to Problem 11.20E

The Breakeven Sales unit for each product is as follows:

	Game Players	Tablets
Breakeven point (units)	25200	10800

Explanation of Solution

The Breakeven Sales unit for each product is calculated as follows:

	Game Players	Tablets	Overall
Unit Selling Price (A)	$ 50	$ 120
Unit Variable Cost (B)	$ 30	$ 80
Unit Contribution Margin (C) =(A-B)	$ 20	$ 40
Sales Mix (D)	70%	30%
Weighted Average Contribution Margin per unit (E) = (C*D)	$ 14	$ 12	$ 26
Total Fixed Cost (F)			$ 936,000
Overall Breakeven point (units) (G) = (F/E)			36,000
*Breakeven point (units) (H) =(GD)**	25200	10800

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Answer 3

Question

Chapter 11, Problem 11.20E

To determine

Concept Introduction:

Cost Volume Profit (CVP) Analysis:

The Cost Volume Profit analysis is the analysis of the relation between cost, volume, and profit of a product. It analyzes the cost and profits at the different level of production, in order to determine the breakeven point and required the level of sales to earn the desired profit.

Contribution margin means the margin that is left with the company after recovering variable cost out of revenue earned by selling smart phones. The formula for contribution margin is as follows:

Contribution margin = Sales - Variable cost.

Similarly contribution margin ratio = Contribution/sales

Breakeven Point:

The Breakeven point is the level of sales at which the net profit is nil. It can be explained as a situation where the business is generating a sale that is equal to the expenses incurred and hence no profits no loss. Breakeven point in units is calculated with the help of following formula:

Breakeven point (units) = Total Fixed Costs(Sales Price Per unit -Variable Cost per unit)

Weighted Average Contribution Margin:

Weighted Average Contribution Margin is calculated for two products with the help of following formula:

Weighted Average Contribution Margin = (Contribution margin of Product A * Weight of product A) + (Contribution margin of Product B * Weight of product B)

Requirement-a:

To Calculate:

The Overall Breakeven Sales unit

Expert Solution

Answer to Problem 11.20E

The Overall Breakeven Sales unit is 36,000 Units

Explanation of Solution

The Overall Breakeven point in units is calculated as follows:

	Game Players	Tablets	Overall
Unit Selling Price (A)	$ 50	$ 120
Unit Variable Cost (B)	$ 30	$ 80
Unit Contribution Margin (C) =(A-B)	$ 20	$ 40
Sales Mix (D)	70%	30%
Weighted Average Contribution Margin per unit (E) = (C*D)	$ 14	$ 12	$ 26
Total Fixed Cost (F)			$ 936,000
Overall Breakeven point (units) (G) = (F/E)			36,000

To determine

Concept Introduction:

Cost Volume Profit (CVP) Analysis:

The Cost Volume Profit analysis is the analysis of the relation between cost, volume, and profit of a product. It analyzes the cost and profits at the different level of production, in order to determine the breakeven point and required the level of sales to earn the desired profit.

Contribution margin means the margin that is left with the company after recovering variable cost out of revenue earned by selling smart phones. The formula for contribution margin is as follows:

Contribution margin = Sales - Variable cost.

Similarly contribution margin ratio = Contribution/sales

Breakeven Point:

The Breakeven point is the level of sales at which the net profit is nil. It can be explained as a situation where the business is generating a sale that is equal to the expenses incurred and hence no profits no loss. Breakeven point in units is calculated with the help of following formula:

Breakeven point (units) = Total Fixed Costs(Sales Price Per unit -Variable Cost per unit)

Weighted Average Contribution Margin:

Weighted Average Contribution Margin is calculated for two products with the help of following formula:

Weighted Average Contribution Margin = (Contribution margin of Product A * Weight of product A) + (Contribution margin of Product B * Weight of product B)

Requirement-b:

To Calculate:

The Breakeven Sales unit for each product

Expert Solution

Answer to Problem 11.20E

The Breakeven Sales unit for each product is as follows:

	Game Players	Tablets
Breakeven point (units)	25200	10800

Explanation of Solution

The Breakeven Sales unit for each product is calculated as follows:

	Game Players	Tablets	Overall
Unit Selling Price (A)	$ 50	$ 120
Unit Variable Cost (B)	$ 30	$ 80
Unit Contribution Margin (C) =(A-B)	$ 20	$ 40
Sales Mix (D)	70%	30%
Weighted Average Contribution Margin per unit (E) = (C*D)	$ 14	$ 12	$ 26
Total Fixed Cost (F)			$ 936,000
Overall Breakeven point (units) (G) = (F/E)			36,000
*Breakeven point (units) (H) =(GD)**	25200	10800

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Answer 4

Question

Chapter 11, Problem 11.20E

To determine

Concept Introduction:

Cost Volume Profit (CVP) Analysis:

The Cost Volume Profit analysis is the analysis of the relation between cost, volume, and profit of a product. It analyzes the cost and profits at the different level of production, in order to determine the breakeven point and required the level of sales to earn the desired profit.

Contribution margin means the margin that is left with the company after recovering variable cost out of revenue earned by selling smart phones. The formula for contribution margin is as follows:

Contribution margin = Sales - Variable cost.

Similarly contribution margin ratio = Contribution/sales

Breakeven Point:

The Breakeven point is the level of sales at which the net profit is nil. It can be explained as a situation where the business is generating a sale that is equal to the expenses incurred and hence no profits no loss. Breakeven point in units is calculated with the help of following formula:

Breakeven point (units) = Total Fixed Costs(Sales Price Per unit -Variable Cost per unit)

Weighted Average Contribution Margin:

Weighted Average Contribution Margin is calculated for two products with the help of following formula:

Weighted Average Contribution Margin = (Contribution margin of Product A * Weight of product A) + (Contribution margin of Product B * Weight of product B)

Requirement-a:

To Calculate:

The Overall Breakeven Sales unit

Expert Solution

Answer to Problem 11.20E

The Overall Breakeven Sales unit is 36,000 Units

Explanation of Solution

The Overall Breakeven point in units is calculated as follows:

	Game Players	Tablets	Overall
Unit Selling Price (A)	$ 50	$ 120
Unit Variable Cost (B)	$ 30	$ 80
Unit Contribution Margin (C) =(A-B)	$ 20	$ 40
Sales Mix (D)	70%	30%
Weighted Average Contribution Margin per unit (E) = (C*D)	$ 14	$ 12	$ 26
Total Fixed Cost (F)			$ 936,000
Overall Breakeven point (units) (G) = (F/E)			36,000

To determine

Concept Introduction:

Cost Volume Profit (CVP) Analysis:

The Cost Volume Profit analysis is the analysis of the relation between cost, volume, and profit of a product. It analyzes the cost and profits at the different level of production, in order to determine the breakeven point and required the level of sales to earn the desired profit.

Contribution margin means the margin that is left with the company after recovering variable cost out of revenue earned by selling smart phones. The formula for contribution margin is as follows:

Contribution margin = Sales - Variable cost.

Similarly contribution margin ratio = Contribution/sales

Breakeven Point:

The Breakeven point is the level of sales at which the net profit is nil. It can be explained as a situation where the business is generating a sale that is equal to the expenses incurred and hence no profits no loss. Breakeven point in units is calculated with the help of following formula:

Breakeven point (units) = Total Fixed Costs(Sales Price Per unit -Variable Cost per unit)

Weighted Average Contribution Margin:

Weighted Average Contribution Margin is calculated for two products with the help of following formula:

Weighted Average Contribution Margin = (Contribution margin of Product A * Weight of product A) + (Contribution margin of Product B * Weight of product B)

Requirement-b:

To Calculate:

The Breakeven Sales unit for each product

Expert Solution

Answer to Problem 11.20E

The Breakeven Sales unit for each product is as follows:

	Game Players	Tablets
Breakeven point (units)	25200	10800

Explanation of Solution

The Breakeven Sales unit for each product is calculated as follows:

	Game Players	Tablets	Overall
Unit Selling Price (A)	$ 50	$ 120
Unit Variable Cost (B)	$ 30	$ 80
Unit Contribution Margin (C) =(A-B)	$ 20	$ 40
Sales Mix (D)	70%	30%
Weighted Average Contribution Margin per unit (E) = (C*D)	$ 14	$ 12	$ 26
Total Fixed Cost (F)			$ 936,000
Overall Breakeven point (units) (G) = (F/E)			36,000
*Breakeven point (units) (H) =(GD)**	25200	10800

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Answer 5

Chapter 11, Problem 11.20E

To determine

Concept Introduction:

Cost Volume Profit (CVP) Analysis:

The Cost Volume Profit analysis is the analysis of the relation between cost, volume, and profit of a product. It analyzes the cost and profits at the different level of production, in order to determine the breakeven point and required the level of sales to earn the desired profit.

Contribution margin means the margin that is left with the company after recovering variable cost out of revenue earned by selling smart phones. The formula for contribution margin is as follows:

Contribution margin = Sales - Variable cost.

Similarly contribution margin ratio = Contribution/sales

Breakeven Point:

The Breakeven point is the level of sales at which the net profit is nil. It can be explained as a situation where the business is generating a sale that is equal to the expenses incurred and hence no profits no loss. Breakeven point in units is calculated with the help of following formula:

Breakeven point (units) = Total Fixed Costs(Sales Price Per unit -Variable Cost per unit)

Weighted Average Contribution Margin:

Weighted Average Contribution Margin is calculated for two products with the help of following formula:

Weighted Average Contribution Margin = (Contribution margin of Product A * Weight of product A) + (Contribution margin of Product B * Weight of product B)

Requirement-a:

To Calculate:

The Overall Breakeven Sales unit

Expert Solution

Answer to Problem 11.20E

The Overall Breakeven Sales unit is 36,000 Units

Explanation of Solution

The Overall Breakeven point in units is calculated as follows:

	Game Players	Tablets	Overall
Unit Selling Price (A)	$ 50	$ 120
Unit Variable Cost (B)	$ 30	$ 80
Unit Contribution Margin (C) =(A-B)	$ 20	$ 40
Sales Mix (D)	70%	30%
Weighted Average Contribution Margin per unit (E) = (C*D)	$ 14	$ 12	$ 26
Total Fixed Cost (F)			$ 936,000
Overall Breakeven point (units) (G) = (F/E)			36,000

To determine

Concept Introduction:

Cost Volume Profit (CVP) Analysis:

The Cost Volume Profit analysis is the analysis of the relation between cost, volume, and profit of a product. It analyzes the cost and profits at the different level of production, in order to determine the breakeven point and required the level of sales to earn the desired profit.

Contribution margin means the margin that is left with the company after recovering variable cost out of revenue earned by selling smart phones. The formula for contribution margin is as follows:

Contribution margin = Sales - Variable cost.

Similarly contribution margin ratio = Contribution/sales

Breakeven Point:

The Breakeven point is the level of sales at which the net profit is nil. It can be explained as a situation where the business is generating a sale that is equal to the expenses incurred and hence no profits no loss. Breakeven point in units is calculated with the help of following formula:

Breakeven point (units) = Total Fixed Costs(Sales Price Per unit -Variable Cost per unit)

Weighted Average Contribution Margin:

Weighted Average Contribution Margin is calculated for two products with the help of following formula:

Weighted Average Contribution Margin = (Contribution margin of Product A * Weight of product A) + (Contribution margin of Product B * Weight of product B)

Requirement-b:

To Calculate:

The Breakeven Sales unit for each product

Expert Solution

Answer to Problem 11.20E

The Breakeven Sales unit for each product is as follows:

	Game Players	Tablets
Breakeven point (units)	25200	10800

Explanation of Solution

The Breakeven Sales unit for each product is calculated as follows:

	Game Players	Tablets	Overall
Unit Selling Price (A)	$ 50	$ 120
Unit Variable Cost (B)	$ 30	$ 80
Unit Contribution Margin (C) =(A-B)	$ 20	$ 40
Sales Mix (D)	70%	30%
Weighted Average Contribution Margin per unit (E) = (C*D)	$ 14	$ 12	$ 26
Total Fixed Cost (F)			$ 936,000
Overall Breakeven point (units) (G) = (F/E)			36,000
*Breakeven point (units) (H) =(GD)**	25200	10800

Answer 6

Chapter 11, Problem 11.20E

To determine

Concept Introduction:

Cost Volume Profit (CVP) Analysis:

The Cost Volume Profit analysis is the analysis of the relation between cost, volume, and profit of a product. It analyzes the cost and profits at the different level of production, in order to determine the breakeven point and required the level of sales to earn the desired profit.

Contribution margin means the margin that is left with the company after recovering variable cost out of revenue earned by selling smart phones. The formula for contribution margin is as follows:

Contribution margin = Sales - Variable cost.

Similarly contribution margin ratio = Contribution/sales

Breakeven Point:

The Breakeven point is the level of sales at which the net profit is nil. It can be explained as a situation where the business is generating a sale that is equal to the expenses incurred and hence no profits no loss. Breakeven point in units is calculated with the help of following formula:

Breakeven point (units) = Total Fixed Costs(Sales Price Per unit -Variable Cost per unit)

Weighted Average Contribution Margin:

Weighted Average Contribution Margin is calculated for two products with the help of following formula:

Weighted Average Contribution Margin = (Contribution margin of Product A * Weight of product A) + (Contribution margin of Product B * Weight of product B)

Requirement-a:

To Calculate:

The Overall Breakeven Sales unit

Expert Solution

Answer to Problem 11.20E

The Overall Breakeven Sales unit is 36,000 Units

Explanation of Solution

The Overall Breakeven point in units is calculated as follows:

	Game Players	Tablets	Overall
Unit Selling Price (A)	$ 50	$ 120
Unit Variable Cost (B)	$ 30	$ 80
Unit Contribution Margin (C) =(A-B)	$ 20	$ 40
Sales Mix (D)	70%	30%
Weighted Average Contribution Margin per unit (E) = (C*D)	$ 14	$ 12	$ 26
Total Fixed Cost (F)			$ 936,000
Overall Breakeven point (units) (G) = (F/E)			36,000

Answer 7

Chapter 11, Problem 11.20E

To determine

Concept Introduction:

Cost Volume Profit (CVP) Analysis:

The Cost Volume Profit analysis is the analysis of the relation between cost, volume, and profit of a product. It analyzes the cost and profits at the different level of production, in order to determine the breakeven point and required the level of sales to earn the desired profit.

Contribution margin means the margin that is left with the company after recovering variable cost out of revenue earned by selling smart phones. The formula for contribution margin is as follows:

Contribution margin = Sales - Variable cost.

Similarly contribution margin ratio = Contribution/sales

Breakeven Point:

The Breakeven point is the level of sales at which the net profit is nil. It can be explained as a situation where the business is generating a sale that is equal to the expenses incurred and hence no profits no loss. Breakeven point in units is calculated with the help of following formula:

Breakeven point (units) = Total Fixed Costs(Sales Price Per unit -Variable Cost per unit)

Weighted Average Contribution Margin:

Weighted Average Contribution Margin is calculated for two products with the help of following formula:

Weighted Average Contribution Margin = (Contribution margin of Product A * Weight of product A) + (Contribution margin of Product B * Weight of product B)

Requirement-a:

To Calculate:

The Overall Breakeven Sales unit

Answer 8

Expert Solution

Answer to Problem 11.20E

The Overall Breakeven Sales unit is 36,000 Units

Answer 9

Expert Solution

Answer 10

Expert Solution

Answer 11

Expert Solution

Answer 12

Explanation of Solution

The Overall Breakeven point in units is calculated as follows:

	Game Players	Tablets	Overall
Unit Selling Price (A)	$ 50	$ 120
Unit Variable Cost (B)	$ 30	$ 80
Unit Contribution Margin (C) =(A-B)	$ 20	$ 40
Sales Mix (D)	70%	30%
Weighted Average Contribution Margin per unit (E) = (C*D)	$ 14	$ 12	$ 26
Total Fixed Cost (F)			$ 936,000
Overall Breakeven point (units) (G) = (F/E)			36,000

Answer 13

To determine

Concept Introduction:

Cost Volume Profit (CVP) Analysis:

The Cost Volume Profit analysis is the analysis of the relation between cost, volume, and profit of a product. It analyzes the cost and profits at the different level of production, in order to determine the breakeven point and required the level of sales to earn the desired profit.

Contribution margin means the margin that is left with the company after recovering variable cost out of revenue earned by selling smart phones. The formula for contribution margin is as follows:

Contribution margin = Sales - Variable cost.

Similarly contribution margin ratio = Contribution/sales

Breakeven Point:

The Breakeven point is the level of sales at which the net profit is nil. It can be explained as a situation where the business is generating a sale that is equal to the expenses incurred and hence no profits no loss. Breakeven point in units is calculated with the help of following formula:

Breakeven point (units) = Total Fixed Costs(Sales Price Per unit -Variable Cost per unit)

Weighted Average Contribution Margin:

Weighted Average Contribution Margin is calculated for two products with the help of following formula:

Weighted Average Contribution Margin = (Contribution margin of Product A * Weight of product A) + (Contribution margin of Product B * Weight of product B)

Requirement-b:

To Calculate:

The Breakeven Sales unit for each product

Expert Solution

Answer to Problem 11.20E

The Breakeven Sales unit for each product is as follows:

	Game Players	Tablets
Breakeven point (units)	25200	10800

Explanation of Solution

The Breakeven Sales unit for each product is calculated as follows:

	Game Players	Tablets	Overall
Unit Selling Price (A)	$ 50	$ 120
Unit Variable Cost (B)	$ 30	$ 80
Unit Contribution Margin (C) =(A-B)	$ 20	$ 40
Sales Mix (D)	70%	30%
Weighted Average Contribution Margin per unit (E) = (C*D)	$ 14	$ 12	$ 26
Total Fixed Cost (F)			$ 936,000
Overall Breakeven point (units) (G) = (F/E)			36,000
*Breakeven point (units) (H) =(GD)**	25200	10800

Answer 14

To determine

Concept Introduction:

Cost Volume Profit (CVP) Analysis:

The Cost Volume Profit analysis is the analysis of the relation between cost, volume, and profit of a product. It analyzes the cost and profits at the different level of production, in order to determine the breakeven point and required the level of sales to earn the desired profit.

Contribution margin means the margin that is left with the company after recovering variable cost out of revenue earned by selling smart phones. The formula for contribution margin is as follows:

Contribution margin = Sales - Variable cost.

Similarly contribution margin ratio = Contribution/sales

Breakeven Point:

The Breakeven point is the level of sales at which the net profit is nil. It can be explained as a situation where the business is generating a sale that is equal to the expenses incurred and hence no profits no loss. Breakeven point in units is calculated with the help of following formula:

Breakeven point (units) = Total Fixed Costs(Sales Price Per unit -Variable Cost per unit)

Weighted Average Contribution Margin:

Weighted Average Contribution Margin is calculated for two products with the help of following formula:

Weighted Average Contribution Margin = (Contribution margin of Product A * Weight of product A) + (Contribution margin of Product B * Weight of product B)

Requirement-b:

To Calculate:

The Breakeven Sales unit for each product

Answer 15

Expert Solution

Answer to Problem 11.20E

The Breakeven Sales unit for each product is as follows:

	Game Players	Tablets
Breakeven point (units)	25200	10800

Answer 16

Expert Solution

Answer 17

Expert Solution

Answer 18

Expert Solution

Answer 19

Explanation of Solution

The Breakeven Sales unit for each product is calculated as follows:

	Game Players	Tablets	Overall
Unit Selling Price (A)	$ 50	$ 120
Unit Variable Cost (B)	$ 30	$ 80
Unit Contribution Margin (C) =(A-B)	$ 20	$ 40
Sales Mix (D)	70%	30%
Weighted Average Contribution Margin per unit (E) = (C*D)	$ 14	$ 12	$ 26
Total Fixed Cost (F)			$ 936,000
Overall Breakeven point (units) (G) = (F/E)			36,000
*Breakeven point (units) (H) =(GD)**	25200	10800

Answer 20

Ch. 11 - Which of the following statements describes...Ch. 11 - If sales are $500,000, variable costs are...Ch. 11 - If the unit selling price is $16. the unit...Ch. 11 - Based on the data presented in Question 3, how...Ch. 11 - Prob. 5SEQ Ch. 11 - Describe how total variable costs and unit...Ch. 11 - How would each of the following costs be...Ch. 11 - Describe the behavior of (a) total fixed costs and...Ch. 11 - How would each of the following costs be...Ch. 11 - In cost analyses, how arc mixed costs treated?

Answer to Problem 11.20E

Explanation of Solution

Answer to Problem 11.20E

Explanation of Solution

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