CVP Analysis
Shown below is information relating to one box of chocolates sold by Sweetwater Candy Company:
	Unit selling price		$24
	Variable cost per unit		$14
Sweetwater's annual fixed costs:			$195,000
(A.)	Calculate Sweetwater's annual break-even point in dollar sales and in number of units sold.
(B.)	The sales budget for next year plans for sales of 20,000 units. Determine the operating income if annual sales are 20,000 units next year.
(C.)	Calculate the dollar amount of annual sales required for Sweetwater to earn an annual operating income of $50,000.
(D.)	The company is considering an expansion that involves more automated equipment. It will increase annual fixed costs by 40% and decrease variable costs by 15%. Compute the new breakeven point in units and in dollars assuming the sales price remains at $24 per unit.
(E.)	Based on the budgeted sales volume of 20,000 units next year, does the expansion seem like a good idea?