How many Panda Bears must be produced and sold each month to break even?

How many Panda Bears must be produced and sold each month to break even?

How many Panda Bears must be produced and sold each month to break even? 150 150 Nyagu

This assignment consists of three independent scenarios for which computations should be shown.

Scenario A

Compute the break-even point in sales dollars if fixed costs are $200,000 and the total contribution margin is 10% of revenue.

Show the analysis in a table format. Write a one-paragraph interpretation of the information presented in the table.

Scenario B

Danny Company makes and sells stuffed animals. One product, Panda Bear, sells for $28 per bear. Panda Bears incur fixed costs of $120,000 per month and a variable cost of $12 per bear. How many Panda Bears must be produced and sold each month to break even?

Show the analysis in a table format. Write a one-paragraph interpretation of the information presented in the table.

Scenario C

Jerry is considering buying a company if it will break even or earn net income on revenues of $100,000 per month. The company that Jerry is considering sells each unit it produces for $5. Use the following cost data to compute the variable cost per unit and the fixed cost for the period. Calculate the break-even point in sales dollars. Should Jerry purchase this company?

Volume (units) Total Cost
8,000 $70,000
68,000 $190,000

Scenario C is more involved than the other three. HINT: You can use the high-low method to determine the fixed and variable portions of the total costs. See for example http://www.principlesofaccounting.com/chapter-18/behavior-analysis/ (from the optional resource in the background material).

Show the analysis in a table format. Write a one-paragraph interpretation of the information presented in the table.

SLP Assignment Expectations

Show computations in good format and explain answers as required. Excel is a great tool to make computations and present financial information in an easy-to-understand format. Write comments below the computations in Excel. Submit only the Excel file. Both content and the clarity of the presentation will be evaluated for grading purposes.