Rachmin Inc. manufactures several models of computer monitors. The basic model sells for $330 and has variable
Question:
Rachmin Inc. manufactures several models of computer monitors. The basic model sells for $330 and
has variable costs of $285 per unit. The deluxe model sells for $510 and has variable costs of $375 per
unit. The professional model sells for $1,800 and has variable costs of $1,200 per unit.
Total fixed expense is $433,500 per year. In general, the company sells six basic models and three deluxe
models for every professional model sold.
Required
(A) Compute the number of basic models, deluxe models, and professional models that are sold at
the breakeven point.
(B) Check you answer to (A) by preparing a contribution margin income statement for Rachmin Inc.
for the year.
(C) According to the authors of the textbook, how do risk and uncertainty relate to Cost-Volume
Profit (CVP) analysis?
OM operations management
ISBN: 978-1285451374
5th edition
Authors: David Alan Collier, James R. Evans