Break-Even Analysis Using the Contribution Margin Option 1 Option 2 Option 3 Volume (units) Price per unit Sales revenue Unit variable cost Contribution margin 0 0 0 Analyze the following three options and preform a Break-Even analysis for each using the contribution margin method for Karl's T Shirt Company Option 1 Option 1 is to import the finished goods internationally for sale domestically in a retail outlet, this option requires a very high minimum purchase order (250,000 Units) however has the advantage of a lower per unit cost and lower fixed costs. This plan has the following costs and revenue associated: Volume (units): 250,000 Selling Price per unit: $11.99 Unit Variable Cost: $9.50 Fixed Costs:$255,000 Depreciation: $5,000 0.00 0.00 0.00 Fixed costs Cash fixed costs Depreciation Total fixed costs 0 o 0 0 Profit loss statement Sales revenue Variable costs Contribution Fixed costs 1 Profit (los) 2 Break-even point in units) 4 Regular break-even of sales 6 Cash break-even 7 % of sales OOOOO ooooo 0 HIV/OI DIV/0! DIV/0! DIV/0! DIV/OI DIV/0! DIV/0! #DIV/0! Option 2 0 This option requires the purchase of a textile machine that can produce fabrics with a higher thread count. Unfinished goods are imported internationally in form of threads and then processed for final sale domestically. It will require an additional investment of $200,000 compared to option 1 but has the O advantage of higher quality goods and as such will sell for a higher price. This plan has the following 0 costs and revenue associated: Volume (units): 180,000 Selling Price Per unit: $25.00 DIV/0! Unit Variable Cost: $21.00 #DIV/0! Foud Costs:$455,000 DIV/0! Depreciation $10,000 DIV/0! Option 3 The last option is to sell custom T-shirts that are made to order. This option requires the highest fixed costs because it requires a printing machine to print custom labels or designs for DIV/! customers. Variable costs for this option are low compared to other options and has the advantage of charging a premium for the shirts being custom and made to order". DIV/0! This plan has the following costs and revenue associated: Volume (units): 80,000 NDIV/0! Selling Price per unit: $25.00 Unit Variable Cost: $15.00 Fred Costs:$1.200,000.00 Depreciation: $40,000 #DIV/0! #DIV/01 - Profit objective O to make (5) 1 you need to sell (units) to make (5) you need to sell (unit) 4 to make (5) 5 you need to sell (units) DIV/0! DIV/ DIV/O DIV/01 7 Break even point in revenue BreakEvenContribution Mannin