# 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.

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Scenario A

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

Show the analysis in an excel table format, and write a 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 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.

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