Monte Carlo analysis This is an exercise to develop basic Monte Carlo modelling skills.

Required:
1. Build a simple CVP model from the data shown above.
2. Assume that the input data are distributed uniformly between the high and low values.
Prepare a Monte Carlo analysis that prepares and describes a simulated distribution of breakeven quantity. Compute mean, standard deviation, minimum and maximum values of this simulated distribution.

Data input Most likely $ 12.00 6.50 675 000 High $13.50 8.48 720000 400000 Low $ 10.65 1.50 547000 400000 Sales price per unit Variable cost per unit Fixed cost per year Profit target per year, before tax 400 000 Target breakeven analysis Fixed costs plus profit target Contribution margin Breakeven or target quantity $ 1075000 5.50 195455 per period per unit units per period