CVP EXERCISES 1. The launch of a new product is being considered and four possible output...

 

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CVP EXERCISES 1. The launch of a new product is being considered and four possible output levels are being considered depending on consumer reaction. The variable costs associated with these levels are shown below Consumer reaction Adverse Average Good Variable costs in shs Excellent 20,000 30,000 45,000 70,000 There are fixed costs of shs 36 000 and the CS ratio is expected to be 60%. Calculate a) The profit or loss at each of the four levels b) The BEP in sales value c) The level of sales at which a profit of shs 10 000 would be made I CVP EXERCISES 1. The launch of a new product is being considered and four possible output levels are being considered depending on consumer reaction. The variable costs associated with these levels are shown below Consumer reaction Adverse Average Good Variable costs in shs Excellent 20,000 30,000 45,000 70,000 There are fixed costs of shs 36 000 and the CS ratio is expected to be 60%. Calculate a) The profit or loss at each of the four levels b) The BEP in sales value c) The level of sales at which a profit of shs 10 000 would be made I

Answer rating: 100% (QA)

To calculate the profit or loss at each of the four levels we need to consider the contribution marg... View the full answer