26 Jan EA 1 Variable Cost EA 3 Unit Contribution Margin Ratio EA 5 Break-even Point, Contribution Martin, Target Profit EA 13 Operating Leverage EA 14 Margin of Safety Instruct
EA 1 Variable Cost
EA 3 Unit Contribution Margin Ratio
EA 5 Break-even Point, Contribution Martin, Target Profit
EA 13 Operating Leverage
EA 14 Margin of Safety
Instructions:
Use excel to create spreadsheets using the correct format as shown in the textbook examples
Create one exercise on each tab – thus creating on Excel file with multiple worksheets – label each worksheet after the problem as show above
Complete this link to verify your calculation 40% https://forms.gle/SsWU7nc12ocGPdyA6
Sumit the Excel file here for additional grading 60%
Show your work for calculated problems – 60% for showing your work 40% for the correct answer
CVP _
https://youtu.be/R8gjp6BCrRI?si=S6Is5fYqMXu1sQIo Links to an external site.
or
https://youtu.be/4U60Ya5ysMU?si=ENwttXFhhx34bcM7 Links to an external site.
or
https://youtu.be/IOE9QB6RYJU?si=q-EBLJ6PYvm4Y8AoLinks to an external site.
Type answers none calculated problems directly into a worksheet within a workbook in Excel – label the worksheet the same as the problem
Save as an Excel file
EA 1.
LO 3.1 Calculate the per-unit contribution margin of a product that has a sale price of $200 if the variable costs per unit are $65.
EA 3.
LO 3.1 A product has a sales price of $150 and a per-unit contribution margin of $50. What is the contribution margin ratio?
EA 5.
LO 3.2 Maple Enterprises sells a single product with a selling price of $75 and variable costs per unit of $30. The company’s monthly fixed expenses are $22,500.
A. What is the company’s break-even point in units?
B. What is the company’s break-even point in dollars?
C. Construct a contribution margin income statement for the month of September when they will sell 900 units.
D. How many units will Maple need to sell in order to reach a target profit of $45,000?
E. What dollar sales will Maple need in order to reach a target profit of $45,000?
F. Construct a contribution margin income statement for Maple that reflects $150,000 in sales volume.
EA 13.
LO 3.5 Company A has current sales of $10,000,000 and a 45% contribution margin. Its fixed costs are $3,000,000. Company B is a service firm with current service revenue of $5,000,000 and a 20% contribution margin. Company B’s fixed costs are $500,000. Compute the degree of operating leverage for both companies. Which company will benefit most from a 25% increase in sales? Explain why.
EA 14.
LO 3.5 Marshall & Company produces a single product and recently calculated their break-even point as shown.
What would Marshall’s target margin of safety be in units and dollars if they required a $14,000 margin of safety?
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