CVP Analysis using a chart:The cost-volume-profit chart for Byron Manufacturing is shown. Use the graph to complete the sentences given below.SALES AND COSTS (Dollars)20000Sales15000Total Costs100005000100 200 300 400 500 600 700 800 900 1000UNITS OF SALESByron Manufacturing reaches its break-even level of activity when it sells 500-v units and generates $12,000v in revenue, because at this level of activity the firm's revenue equals-v its total cost. In addition, you candetermine from the chart that Byron Manufacturing's fixed costs are $6,000-v and its price per unit is $24.00V and variable cost per unit is $12.00If fixed costs increase, what will happen to the break-even point?The break-even point will increase.If the price per unit decreases, what will happen to the break-even point?The break-even point will increase. CVP analysis is used to analyze the effects of changes in selling prices, costs and volume on profits. It is also used to determine target profit, the margin of safety, operating leverage, product mix and choosing among marketing strategies andothers.Suppose Byron management has a target operating income of $3,000. Assume the same costs as above and the sell price remains at $24 per unit. How many units does Byron need to sell to meet this goal?unitsWhat is Byron's margin of safety in sales and in units when Byron sells 730 units?Margin of safety in sales $Margin of safety in unitsunitsWhat is the degree of operating leverage when 730 units are sold? If required, round your answer to two decimal places.FeedbackV Check My WorkRefer to the rollovers for help with the calculations for target units, margin of safety, and degree of leverage calculations.

Answered: Image /qna-images/answer/cb2fa55e-cb2c-41fa-a9a7-876077ea4a38.jpg

thers. uppose Byron management has a target operating income of $3,000. Assume the same costs as above and the sell price remains at $24 per unit. How many units does Byron need to sell to meet this goal? units What is Byron's margin of safety in sales and in units when Byron sells 730 units? largin of safety in sales s Margin of safety in units units /hat is the degree of operating leverage when 730 units are sold? required, round your answer to two decimal places.

thers. uppose Byron management has a target operating income of $3,000. Assume the same costs as above and the sell price remains at $24 per unit. How many units does Byron need to sell to meet this goal? units What is Byron's margin of safety in sales and in units when Byron sells 730 units? largin of safety in sales s Margin of safety in units units /hat is the degree of operating leverage when 730 units are sold? required, round your answer to two decimal places.

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter6: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 17E

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CVP Analysis using a chart: The cost-volume-profit chart for Byron Manufacturing is shown in the screenshot. Use the graph to complete the sentences given below. Byron Manufacturing reaches its break-even level of activity when it sells _____________ (200, 400, 500, 600) units and generates __________ ($5,000, $10,000, $12,000, $15,000) in revenue, because at this level of activity the firm's revenue ____________ (is greater than, is less than, equals) its total cost. In addition, you can determine from the chart that Byron Manufacturing's fixed costs are ________ (5,000, $6,000, $10,000, $12,000) and its price per unit is __________ ($.04, $10.00, $24.00, $30.00) and variable cost per unit is __________ ($.04, $10.00, $12.00, $24.00) A. If fixed costs increase, what will happen to the break-even point? ______ a. The break-even point will increase. b. The break-even point will decrease. B. If the price per unit decreases, what will happen to the break-even point? ________ a. The…
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