Project 5 – 35 pointsACTG3000
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
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