Corveau Company expects to sell 400,000 units of its product next year, which would generate total sales

Question:

Corveau Company expects to sell 400,000 units of its product next year, which would generate total sales of $34 million. Management predicts that pretax net income for next year will be $2,500,000 and that the per unit will be $50.
(1) Use this information to compute next year’s total expected
(a) Variable costs and
(b) Fixed costs.
(2) Prepare a CVP chart from this information.

Contribution Margin
Contribution margin is an important element of cost volume profit analysis that managers carry out to assess the maximum number of units that are required to be at the breakeven point. Contribution margin is the profit before fixed cost and taxes...