Let's say the following numbers are available after an analysis, what is the CTO? (contribution to overhead)
Question:
Let's say the following numbers are available after an analysis,
what is the CTO? (contribution to overhead)
Sales = $1.00
Variable costs = 0.8964
What is the CTO? ____________________________
This means the amount that can be applied to overhead after all
variable costs are paid. This was calculated as a % of sales.
Calculate breakeven point.
How many units (dollars) of sales are needed to
completely cover all costs?
Breakeven
=
_________Fixed costs_____________
(Sales dollars)
1.0 - Variable costs as a portion of net sales
Breakeven
=
_________Fixed Costs_____________
(Sales units)
Selling price per unit - variable cost per unit
Fixed costs are $1,149,722.
CTO figure from above ________________.
Calculate the breakeven sales volume in dollars __________________
Write your answer here.
Using the following numbers calculate the possible profit.
Actual sales = $13.410,000
Breakeven point = 11,097,703
What are sales above breakeven? ___________________
Multiply this by the CTO of _________________________
Estimated profit is ________________________________
Think about it - why did you use the CTO amount again? Book
as the answer.
Accounting concepts and applications
ISBN: 978-0538745482
11th Edition
Authors: Albrecht Stice, Stice Swain