How do we find the following under break even analysis when the only variable co

Question

How do we find the following under break even analysis when the only variable costs we know of is the %?

ACCG200 2018 S2 Excel Assessment.xlsm a- Search Sheet Home Insert Page Layout Formulas DataReview View t Share e Trass procedura Calculate Now Insert Nutos.m ecently Financial Logical Text Cate & Lookup s wath & More Creste rem Si enmulas Checkingtions Cost Volume Profit Analysis Product Name Unit Sales Price Total Urits Sold Break-Even Analysi Cantributian Margin per Unit Break Even Volume in Urits Broak EvenSlos Value 4900.00 350 Variable Manufacturing Casts Direct Material Direct Labour Factory Overhead Other Variable Manufacturing Costs Total Variable Manufacturing Costs 1,877.22 120.00 Fhed Cost Items 9 Rent 10 tlities 11 Acrmin Costs 12 Loan Repayments 50,000.00 5 14,100.00 22,600.00 68,280.00 1250.0n 167480.00 riable Selling and Admin Casts 5a es Commission5 Variable Admin Conts Total Variable Seling and Adrmin Costs Break Even Variable Costs Direct Material Direct Labour arable Factary Overhead Other Varable Manufacturing Costs 5.0% 14 TtalRxed Costs 15 6.5% Varable Admin Costs Total Variable Costs 17 18 State Tax Federal Tax 10 056 Contribution Margin Prafit Before Incame Tax 21 26 28 30 Inrmaan Labour Costs CVP Analysis Potit Voluma Forecast Invantary+ Ready

Explanation / Answer

Variable selling and admin cost per unit = $4900 x 6.5% = $318.50

Total variable cost per unit = $3695.9 + $318.50 = $4014.40

1. Contribution margin per unit = Selling price - Total variable cost per unit

= $4900 - $4014.40

= $885.60

2. Breakeven volume in units = Total fixed costs/ Contribution margin per unit

= $167480/ $885.60

= 189 units

3. Breakeven sale value = 189 units x $4900 = $926100

PV Ratio = Contribution margin per unit/ Selling price

= $885.60/ $4900

= 18.07%

Breakeven variable costs:

Direct material = $1877.22 x 189 units = $354795

Direct labor = $1618.68 x 189 units = $305931

Factory overhead = $120 x 189 units = $22680

Other variable manufacturing cost = $80 x 189 units = $15120

Sales commissions = 189 x $4900 x 5% = $46305

Variable admin costs = 189 x $4900 x 1.5% = $13892

Total variable costs = 354795 + 305931 + 22680 + 15120 + 46305 + 13892 = $758723

Contribution margin = Sales - Total variable costs = 926100 - 758723 = $167377

Profit before tax = Contribution margin - total fixed cost

= 0 (approx.)

Related Questions

Navigate

• Browse (All)
• Browse H
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.