ACC403, Cost Behavior and Cost-Volume-Profit Analysis

ACC403, Cost Behavior and Cost-Volume-Profit Analysis 

DUE: SUNDAY 01 0CTOBER 2017 @ 3:00 PM EST.

Show computations in good format and explain answers as required. Write comments below the computations in Excel. MUST BE COMPLETED IN EXCEL.

Scenario A

Compute the break-even point in sales dollars if fixed costs are $200,000 and the total contribution margin is 20% of revenue. 

Show the analysis in an excel table format, and write a one-paragraph interpretation of the information presented in the table.

Scenario B 

Danny Company makes and sells stuffed animals.  One product, Panda Bear, sells for $28 per bear.  Panda Bears incur fixed costs of $100,000 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 an excel table format, and write a one-paragraph interpretation of the information presented in the table..

Scenario C

Jerry is considering buying a company if it will break even or earn net income on revenues of $80,000 per month.  The company that Peter 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)     Cost

8,000                          $70,000

68,000                       $190,000

Show the analysis in an excel table format, and write a one-paragraph interpretation of the information presented in the table.

Scenario D

Reliable Delivery currently delivers packages for $9 each. The variable cost is $3 per package, and fixed costs are $60,000 per month. Compute the break-even point in both sales dollars and units under each of the following independent assumptions. Comment on why the break-even points are different.

1. The costs and selling price are as just given.

2. Fixed costs are increased to $75,000.

3. Selling price is increased by 10%. (Fixed costs are $60,000.)

4. Variable cost is increased to $4.50 per unit. (Fixed costs are $60,000 and selling price is $9.)

5. Show the analysis in an excel table format, and write a one-paragraph interpretation of the information presented in the table.