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 ) To Calculate: The Overall Breakeven point in units

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Answer 1

Question

Chapter 11, Problem 11.5.1P

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:

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

To Calculate:

The Overall Breakeven point in units

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Answer 2

Question

Chapter 11, Problem 11.5.1P

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:

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

To Calculate:

The Overall Breakeven point in units

Expert Solution & Answer

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Check out a sample textbook solution

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Answer 3

Question

Chapter 11, Problem 11.5.1P

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:

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

To Calculate:

The Overall Breakeven point in units

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 4

Question

Chapter 11, Problem 11.5.1P

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:

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

To Calculate:

The Overall Breakeven point in units

Expert Solution & Answer

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Check out a sample textbook solution

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Answer 5

Chapter 11, Problem 11.5.1P

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:

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

To Calculate:

The Overall Breakeven point in units

Answer 6

Chapter 11, Problem 11.5.1P

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:

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

To Calculate:

The Overall Breakeven point in units

Answer 7

Chapter 11, Problem 11.5.1P

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:

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

To Calculate:

The Overall Breakeven point in units

Answer 8

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Answer 9

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Answer 10

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Answer 11

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?

Solution Summary: The author explains Cost Volume Profit analysis, which analyzes the relation between cost, volume, and profit of a product. Contribution margin is the margin left with the company after recovering variable cost out of revenue earned by selling smart phones.

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Chapter 11 Solutions