APPLY THE CONCEPTS: Use the CVP graph to analyze the effects of changes in price and...

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APPLY THE CONCEPTS: Use the CVP graph to analyze the effects of changes in price and costs Graph the following on your own paper. At the original position, the break-even point in sales dollars is $24,000 at 500 units. The fixed costs are $8,000. x. x. Assume the slope of the sales line is equal to the selling price. When the two points of the sales line are at the origin and the break-even point, you see that the slope of the line is $48, which means that the selling price is $ When the two points of the total costs line are at the origin and the break-even point, you see that the slope of the line is $32.00, which means that the variable cost per unit is $ Leave the break-even point (x) at its original position. Use it as a reference point to answer the following questions. Analyze the scenarios by sliding the points on the lines to get the slope desired. Recall that the new break-even point for each scenario exists where the sales and total costs lines intersect. Compare it to the original break-even point (x). (You may want to put the lines back to their original position for each scenario.) Each scenario should be considered independently. 1. The company purchases a fixed asset and increases fixed costs by $2,000. Variable costs remain the same, which means that the slope does not change. This will cause the break-even point to move to the right increases . 2. A new supplier can provide a product of equal quality at $4.00 per unit less than the current direct materials cost. If the new supplier is used, the slope of the total costs line will be 3. Market research shows that a price increase will decrease the number of units sold. A price increase will cause the slope of the sales line to increase , which means that fewer left units will need to be sold to break even. which means that break-even point in sales dollars X, and the break-even point in sales dollars decreases . But internal analysis shows that this price increase will cause the break-even point in sales to shift to the Feedback Check My Work Changes in fixed cost will move the Total Cost Line straight up and down. Changes to variable cost will cause the Total Cost Line to pivot around its starting point. Changes to sales price will cause the Sales Line to pivot around its starting point. Feedback Check My Work Partially correct APPLY THE CONCEPTS: Use the CVP graph to analyze the effects of changes in price and costs Graph the following on your own paper. At the original position, the break-even point in sales dollars is $24,000 at 500 units. The fixed costs are $8,000. x. x. Assume the slope of the sales line is equal to the selling price. When the two points of the sales line are at the origin and the break-even point, you see that the slope of the line is $48, which means that the selling price is $ When the two points of the total costs line are at the origin and the break-even point, you see that the slope of the line is $32.00, which means that the variable cost per unit is $ Leave the break-even point (x) at its original position. Use it as a reference point to answer the following questions. Analyze the scenarios by sliding the points on the lines to get the slope desired. Recall that the new break-even point for each scenario exists where the sales and total costs lines intersect. Compare it to the original break-even point (x). (You may want to put the lines back to their original position for each scenario.) Each scenario should be considered independently. 1. The company purchases a fixed asset and increases fixed costs by $2,000. Variable costs remain the same, which means that the slope does not change. This will cause the break-even point to move to the right increases . 2. A new supplier can provide a product of equal quality at $4.00 per unit less than the current direct materials cost. If the new supplier is used, the slope of the total costs line will be 3. Market research shows that a price increase will decrease the number of units sold. A price increase will cause the slope of the sales line to increase , which means that fewer left units will need to be sold to break even. which means that break-even point in sales dollars X, and the break-even point in sales dollars decreases . But internal analysis shows that this price increase will cause the break-even point in sales to shift to the Feedback Check My Work Changes in fixed cost will move the Total Cost Line straight up and down. Changes to variable cost will cause the Total Cost Line to pivot around its starting point. Changes to sales price will cause the Sales Line to pivot around its starting point. Feedback Check My Work Partially correct