COST BEHAVIOR AND COST-VOLUME-PROFIT ANALYSIS
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Engagement – civic and citizen- driven public policy | SS238 Engagement – Civic – and Citizen-Driven Public Policy | Purdue UniversityJuly 1, 2021
This assignment consists of three independent scenarios for which computations should be shown.Scenario ACompute the break-even point in sales dollars if fixed costs are $200,000 and the total contribution margin is 10% of revenue.Show the analysis in a table format. Write a one-paragraph interpretation of the information presented in the table.Scenario BDanny Company makes and sells stuffed animals. One product, Panda Bear, sells for $28 per bear. Panda Bears incur fixed costs of $120,000 per month and a variable cost of $12 per bear. How many Panda Bears must be produced and sold each month to break even?Show the analysis in a table format. Write a one-paragraph interpretation of the information presented in the table.Scenario CJerry is considering buying a company if it will break even or earn net income on revenues of $100,000 per month. The company that Jerry is considering sells each unit it produces for $5. Use the following cost data to compute the variable cost per unit and the fixed cost for the period. Calculate the break-even point in sales dollars. Should Jerry purchase this company?Volume (units) Total Cost8,000 $70,00068,000 $190,000Scenario C is more involved than the other three. HINT: You can use the high-low method to determine the fixed and variable portions of the total costs. See for example http://www.principlesofaccounting.com/chapter-18/behavior-analysis/ (from the optional resource in the background material).Show the analysis in a table format. Write a one-paragraph interpretation of the information presented in the table.attached is example of table needed
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