Directions
1) In this section, the cost parameters are given; your task is to determine which costs are fixed and those variable; please notate with a “X” in the adjacent colums
VC – Costs that vary/change depending on the company’s production volume
FC – Costs that do not change in relation to production volume
Item Factor Value Variable Costs Fixed Costs
2) Calculate the number of units by month using the data provided in the Exercise descriptive
Estimated Annual Units 1000 Number of units
Month 1 0
Month 2 0
Month 3 0
Month 4 0
Month 5 0
Month 6 0
Month 7 0
Month 8 0
Month 9 0
Month 10 0
Month 11 0
Month 12 0
4) In the worksheet, Breakeven Analysis 1, begin experimenting with selling price per unit you reach a net profit of 0%
What is the unit sell price?
What is the Variable cost %
What is the total variable cost $s per unit
5) In the worksheet, Breakeven Analysis 2, reduce total variable costs by 5%
The experiment with the selling unit price until reaching a net profit of 10%
Category Value
VC Item 1
VC Item 2
VC Item 3
What is the new unit sell price?
What is the new Variable cost %
What is the total variable cost $s per unit
Breakeven Analysis 1
Total Units –
Total Revenues –
Contribution margin –
Total Variable Costs –
Total Fixed Cost –
Net Profit % ERROR:#DIV/0!
Annual Breakeven Units ERROR:#DIV/0!
Selling price per unit Figures are in 000s
Jan-21 Feb-21 Mar-21 Apr-21 May-21 Jun-21 Jul-21 Sep-21 Oct-21 Nov-21 Dec-21 Jan-22
Estimated Number of Units Sold
Total Revneue $ – $ – $ – $ – $ – $ – $ – $ – $ – $ – $ – $ –
Revenue per Unit ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0!
Variable cost (VC) Factors
– – – – – – – – – – – –
– – – – – – – – – – – –
– – – – – – – – – – – –
– – – – – – – – – – – –
– – – – – – – – – – – –
– – – – – – – – – – – –
– – – – – – – – – – – –
– – – – – – – – – – – –
Total variable cost (VC) 0.00 /unit $ – $ – $ – $ – $ – $ – $ – $ – $ – $ – $ – $ –
Total variable cost (VC) per unit ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0!
Total variable cost (VC) % ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0!
Contribuiton Margin (CM) $ – $ – $ – $ – $ – $ – $ – $ – $ – $ – $ – $ –
Contirbution Margin % ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0!
Fixed Cost (FC) or Operating Expenses
0 0 0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0 0 0
Total Fixed Cost (FC) $ – $ – $ – $ – $ – $ – $ – $ – $ – $ – $ – $ –
Net Profit Margin Dollars $ – $ – $ – $ – $ – $ – $ – $ – $ – $ – $ – $ –
Net Profit Margin % ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0!
Break Even Units ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0!
Production Gap ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0!
Breakeven Analysis 2
Total Units –
Total Revenues –
Contribution margin –
Total Fixed Cost –
Net Profit % ERROR:#DIV/0!
Annual Breakeven Units ERROR:#DIV/0!
Selling price per unit $ 0.00 Variable Cost Reduction 0% New Variable cost target 0 New Variable Cost % ERROR:#DIV/0! Target Net Profit 0%
Jan-21 Feb-21 Mar-21 Apr-21 May-21 Jun-21 Jul-21 Aug-21 Sep-21 Oct-21 Nov-21 Dec-21
Estimated Number of Units Sold 0 0 0 0 0 0 0 0 0 0 0 0
Total Revneue $ – $ – $ – $ – $ – $ – $ – $ – $ – $ – $ – $ –
Revenue per Unit ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0!
Variable cost Reduced Factors Current factors
0 0.00 0.00 – – – – – – – – – – – –
0 0.00 0.00 – – – – – – – – – – – –
0 0.00 0.00 – – – – – – – – – – – –
0 0.00 0.00 – – – – – – – – – – – –
0 0.00 0.00 – – – – – – – – – – – –
0 0.00 0.00 – – – – – – – – – – – –
0 0.00 0.00 – – – – – – – – – – – –
0 0.00 0.00 – – – – – – – – – – – –
Total variable cost (VC) 0.00 0.00 $ – $ – $ – $ – $ – $ – $ – $ – $ – $ – $ – $ –
Total variable cost (VC) per unit ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0!
Total variable cost (VC) % ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0!
Contribuiton Margin (CM) $ – $ – $ – $ – $ – $ – $ – $ – $ – $ – $ – $ –
Contirbution Margin % ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0!
Fixed Cost (FC) or Operating Expenses
0 0.00 0 0 0 0 0 0 0 0 0 0 0 0
0 0.00 0 0 0 0 0 0 0 0 0 0 0 0
0 0.00 0 0 0 0 0 0 0 0 0 0 0 0
0 0.00 0 0 0 0 0 0 0 0 0 0 0 0
0 0.00 0 0 0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0 0 0 0 0
0 0.00 0 0 0 0 0 0 0 0 0 0 0 0
Total Fixed Cost $ – $ – $ – $ – $ – $ – $ – $ – $ – $ – $ – $ –
Net Profit Margin Dollars $ – $ – $ – $ – $ – $ – $ – $ – $ – $ – $ – $ –
Net Profit Margin % ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0!
Break Even Units ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0!
Production Gap ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0!
CVP Scenario Data I
Variable cost$ ERROR:#DIV/0!
Increase Sale Price Change % 20%
Decrease Sale Price Change % -5%
Beginning Sales Price $s $ – 0 Earnings Objective
Fixed Cost $s $ – 0 10% Objective 13% Objective 15% Objective
As Is Scenario
Unit Sales Price 0.00 Senario 1 Senario 2 Senario 3
Variable Costs per Unit ERROR:#DIV/0! Baseline 1.75 X Baseline Units 2.20 X Baseline Units 2.60 X Baseline Units
Units Required 0 ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0!
Revenue 0 ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0!
Variable Costs 0 ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0!
Fixed Costs 0 0 0 0 0
Total Costs 0 ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0!
Profit before taxes 0 ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0!
Earnings % 0% ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0!
Increased Price Scenarios
Unit Sales Price 0.00 Senario 1 Senario 2 Senario 3
Variable Costs per Unit ERROR:#DIV/0! Baseline 1.40 X Baseline Units 1.55 X Baseline Units 1.68 X Baseline Units
Units Required 0 ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0!
Revenue 0 ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0!
Variable Costs 0 ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0!
Fixed Costs 0 0 0 0 0
Total Costs 0 ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0!
Profit before taxes 0 ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0!
Earnings % N/A ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0!
Decreased Price Scenarios
Unit Sales Price 0.00 Senario 1 Senario 2 Senario 3
Variable Costs per Unit ERROR:#DIV/0! Baseline 3.00 X Baseline Units 5.50 X Baseline Units 20.00 X Baseline Units
Units Required 0 ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0!
Revenue 0 ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0!
Variable Costs 0 ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0!
Fixed Costs 0 0 0 0 0
Total Costs 0 ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0!
Profit before taxes 0 ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0!
Earnings % N/A ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0!
Optiimal Price Scenarios
Unit Sales Price ERROR:#REF! Senario 1 Senario 2 Senario 3
Variable Costs per Unit ERROR:#DIV/0! Baseline 1.70 X Baseline Units 2.50 X Baseline Units 2.70 X Baseline Units
Units Required 0 ERROR:#REF! ERROR:#REF! ERROR:#REF! ERROR:#REF!
Revenue 0 ERROR:#REF! ERROR:#REF! ERROR:#REF! ERROR:#REF!
Variable Costs 0 ERROR:#REF! ERROR:#REF! ERROR:#REF! ERROR:#REF!
Fixed Costs 0 0 0 0 0
Total Costs 0 ERROR:#REF! ERROR:#REF! ERROR:#REF! ERROR:#REF!
Profit before taxes 0 ERROR:#REF! ERROR:#REF! ERROR:#REF! ERROR:#REF!
Earnings % N/A ERROR:#REF! ERROR:#REF! ERROR:#REF! ERROR:#REF!
Current Price Scenario I
Current Price Scenario 1
Fixed Costs 0 0 0 0 0 0 0 0 0 0 Variable Costs 0 0 0 0 0 0 0 0 0 0 Profit before taxes 0 0 0 0 0 0 0 0 0 0 Earnings % 0 0 0 0 0 0 0 0 0 0 Revenue 0 0 0 0 0 0 0 0 0 0 Total Costs 0 0 0 0 0 0 0 0 0 0 Units
Revenue
Increase Price Scenario I
Increased Price Scenario 1
Fixed Costs 0 0 0 0 0 0 0 0 0 0 Variable Costs 0 0 0 0 0 0 0 0 0 0 Profit before taxes 0 0 0 0 0 0 0 0 0 0 Revenue 0 0 0 0 0 0 0 0 0 0 Total Costs 0 0 0 0 0 0 0 0 0 0 Units
Revenue
Decrease Price Scenario I
Decrease Price Scenario 1
Fixed Costs 0 0 0 0 0 0 0 0 0 0 Variable Costs 0 0 0 0 0 0 0 0 0 0 Profit before taxes 0 0 0 0 0 Total Costs 0 0 0 0 0 0 0 0 0 0 Revenue 0 0 0 0 0 0 0 0 0 0 Units
Revenue
CVP Scenario Data 2
Variable cost$ 0.00
Increase Sale Price Change % 10%
Decrease Sale Price Change % -10%
Beginning Sales Price $s $ – 0 Earnings Objective
Fixed Cost $s $ – 0 10% Objective 13% Objective 15% Objective
As Is Scenario
Unit Sales Price 0.00 Senario 1 Senario 2 Senario 3
Variable Costs per Unit 0.00 Baseline 1.45 X Baseline Units 1.65 X Baseline Units 1.85 X Baseline Units
Units Required 0 ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0!
Revenue 0 ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0!
Variable Costs 0 ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0!
Fixed Costs 0 0 0 0 0
Total Costs 0 ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0!
Profit before taxes 0 ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0!
Earnings % 0% ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0!
Increased Price Scenarios
Unit Sales Price 0.00 Senario 1 Senario 2 Senario 3
Variable Costs per Unit 0.00 Baseline 1.30 X Baseline Units 1.43 X Baseline Units 1.55 X Baseline Units
Units Required 0 ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0!
Revenue 0 ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0!
Variable Costs 0 ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0!
Fixed Costs 0 0 0 0 0
Total Costs 0 ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0!
Profit before taxes 0 ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0!
Earnings % N/A ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0!
Decreased Price Scenarios
Unit Sales Price 0.00 Senario 1 Senario 2 Senario 3
Variable Costs per Unit 0.00 Baseline 1.70 X Baseline Units 2.10 X Baseline Units 2.65 X Baseline Units
Units Required 0 ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0!
Revenue 0 ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0!
Variable Costs 0 ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0!
Fixed Costs 0 0 0 0 0
Total Costs 0 ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0!
Profit before taxes 0 ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0!
Earnings % N/A ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0!
Optiimal Price Scenarios
Unit Sales Price ERROR:#REF! Senario 1 Senario 2 Senario 3
Variable Costs per Unit 0.00 Baseline 1.70 X Baseline Units 2.50 X Baseline Units 2.70 X Baseline Units
Units Required 0 ERROR:#REF! ERROR:#REF! ERROR:#REF! ERROR:#REF!
Revenue 0 ERROR:#REF! ERROR:#REF! ERROR:#REF! ERROR:#REF!
Variable Costs 0 ERROR:#REF! ERROR:#REF! ERROR:#REF! ERROR:#REF!
Fixed Costs 0 0 0 0 0
Total Costs 0 ERROR:#REF! ERROR:#REF! ERROR:#REF! ERROR:#REF!
Profit before taxes 0 ERROR:#REF! ERROR:#REF! ERROR:#REF! ERROR:#REF!
Earnings % N/A ERROR:#REF! ERROR:#REF! ERROR:#REF! ERROR:#REF!
Current Price Scenario 2
Increase Price Scenario 2
Decrease Price Scenario 2
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