ACWKFI – CVP income statement
Please see the attached excel file and complete it in its entirety (Problems 1 & 2 located at the bottom tabs of the workbook). Any questions, please feel free to contact me.
Problem 1
| Instructions | ||
| A. Prepare a CVP income statement based on these cost estimates. | ||
| B. Commute contribution margin ratio. | ||
| C. Compute the break-even point in (1) units and (2) dollars. | ||
| D. Compute the margin of safety ratio. | ||
| E. Determine the sales dollars required to earn net income of $1,000,000. | ||
Problem 2
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| a. Prepare a CVP for Elliott based on the current production. | |||||
| b. Compute contribution margin ratio for current production. | |||||
| c. Compute breakeven dollars for current production. | |||||
| d. Prepare a CVP based on the proposed equipment upgrade. | |||||
| e. Compute contribution margin ratio based on the proposed equipment upgrade. | |||||
| f. Compute breakeven dollars for current production. | |||||
| g. Should Elliott proceed with the proposed upgrade? | |||||
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