Chapter 20, Problem 40AP

1.

To determine

Determine the breakeven revenue in dollars by using the contribution margin ratio approach.

Determine required sales in units at breakeven point when sales price per trade is $1,000.

2.

To determine

Determine the dollar revenues needed to earn target profit of $12,600, by using the equation approach.

3.

To determine

Draw a CVP graph for Company N and show the breakeven point, sales revenue line, the fixed cost line, the total costs line, the operating loss area, the operating income area, and the sales in units and dollars are depicted, if the company earned a monthly operating income of $12,600.

4.

To determine

Determinethe new breakeven point in units, if sales price per trade is increased to $1,200. Explain how it affects breakeven point.