excel

Accounting 347 Cost Volume Profit Problem – First Project

Spring 2017

Query company’s projected income statement shows the following results from

selling 100,000 units of product. Net sales are $2,000,000 – total expenses are

$1,760,000 – net income is $240,000. The details of the expenses are as

following:

FIXED VARIABLE TOTAL

Cost of goods sold $420,000.00 $780,000.00 $1,200,000.00

Selling expenses $340,000.00 $100,000.00 $440,000.00

Administrative expenses $60,000.00 $60,000.00 $120,000.00

Total Expenses $820,000.00 $940,000.00 $1,760,000.00

Compute the break-even point in dollars and units for each of the independent

alternatives:

1. Increase unit selling price by 20% with no change in variable or fixed

costs.

2. Increase the sales volume by 20% but keep the price per unit the same.

3. Change the compensation of salespersons (selling expenses) to 10%

commission of sales with no fixed cost.

THIS PROJECT AND ALL CALCULATIONS MUST BE DONE USING A SPREADSHEET (i.e. Excel)