Question Description
Using the datain OM textProblem 5 on p.218, do the cost-volume analysis to answer the questions’a-e’ given here: (not the ones in the book). For eachquestion do these 4 tasks:
1)identify the formula used for the calculation either from the textbook pgs208-09 or from the list provided in the ‘Content’ Resources folder= Wk-04 Cost-Volume Formulas.8a.doc
2)set-up the calculation by inserting data into the formula chosen
3)solve the calculations for the answer
4)answer the management analysis question for each calculation.
Problemquestions:
a.What is the monthly breakeven in units if the price is $1.00 each? Inrevenue? Will the forecast sales be profitable?
b.What price must be charged to earn a monthly profit of $5,000 if the forecastis correct? Is this likely to be happen?
c.What volume is needed at a price of $1.00 to earn a monthly profit of $5,000?Is this likely to happen?
d.What volume is needed at a price of $1.00 to obtain a monthly profit of $.10per unit? Is this likely to happen?
e.What volume is needed at a price of $1.00 to obtain a monthly revenue of$20,000? Is this likely to happen?