Contribution Margin Analysis and Break Even Scenarios in

School: California College San Diego - Course: ACC 212 - Subject: Accounting

Insert formulas and cell references into the "gold" cells below. Scenario 1 Contribution Margin StatementRatiosPer Unit Information 30,000 boxes sold Sales Revenues€ 225,000€ 7.50 [4] Variable Expense€ 163,50072.67% [2]€ 5.45[5] Contribution Margin€ 61,50027.33% [1]€ 2.05 [6] CM per unit Fixed Expenses€ 47,875 Net Operating Income€ 13,6256.06% [3] Scenario 2 Contribution Margin StatementRatiosPer Unit Information 40,000 boxes sold Sales Revenues€ 300,000€ 7.50 [13] Variable Expense€ 218,00072.67% [10]€ 5.45[14] Contribution Margin€ 82,00027.33% [9]€ 2.05 [15] CM per unit Fixed Expenses€ 47,875 Net Operating Income [11]€ 34,12511.38% [12] Scenario 3 Contribution Margin StatementRatiosPer Unit Information 20,000 boxes sold Sales Revenues€ 150,000€ 7.50 Variable Expense€ 109,00072.67%€ 5.45 Contribution Margin€ 41,00027.33%€ 2.05 CM per unit Fixed Expenses€ 47,875 Net Operating Income [18]-€ 6,875-4.58% [19] Scenario 4 Contribution Margin StatementRatiosPer Unit Information 30,000 boxes sold Sales Revenues€ 222,000€ 7.40 Variable Expense€ 163,50073.65%€ 5.45 Contribution Margin€ 58,50026.35% [24]€ 1.95 CM per unit Fixed Expenses€ 47,875 Net Operating Income [22]€ 10,6254.79% Scenario 5 Contribution Margin StatementRatiosPer Unit Information 30,000 boxes sold Sales Revenues€ 240,000€ 8.00 Variable Expense€ 169,50070.63%€ 5.65 Contribution Margin€ 70,50029.38%€ 2.35 CM per unit Fixed Expenses€ 47,875

Net Operating Income [25]€ 22,6259.43% [27] Scenario 6 Contribution Margin StatementRatiosPer Unit Information 30,000 boxes sold Sales Revenues€ 225,000€ 7.50 Variable Expense€ 147,15065.40%€ 4.91 Contribution Margin€ 77,85034.60%€ 2.60 CM per unit Fixed Expenses€ 59,875 Net Operating Income [28]€ 17,9757.99% [30] Question Answers: 23. The break even point has increased compared to the one I found. 24. The changed was caused by a price decrease of 0.10. 25. If the Marketing Department's Assumptions are true, the net operating income will be € 22,625. So 26. The break even point has decreased compared to the one I 27. The contribution margin ratio is higher due to the fact that the sales price increased. 28. The new operating income will be € 17,975 which is less than Scenario 5. So yes, they should invest 29. The break even point with the new process is a little less than the original one I created. 30. The contribution margin ratio is greater because the fixed costs increa