ACTG3000 Project 4

Project 4 – 16 points

ACTG3000

For this project, you will create a scenario for a business or other organization and use CVP analysis to show the following:

1. Breakeven in units

2. Breakeven in dollars

3. Target sales in units for achieving a $50,000 target NI

4. Target sales in dollars for achieving a $50,000 target NI

5. You realize that your scenario’s actual capacity is limited to its breakeven number of units (BEu, as calculated in #1 above). Calculate what the new sales price (SP) should be in order to achieve a $10,000 NI using the BEu (#1 above) for sales volume (Q).

6. Same as #5, except this time calculate what the new variable cost per unit (VC) would need to be in order to achieve a $10,000 NI using the BEu (#1 above) for sales volume (Q).

Requirements:

A. Define each CVP variable for your scenario:

SP =

VC =

FC =

B. Calculate:

CM per unit =

CM ratio =

C. Calculate #1 – 6 above, showing all calculations