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Chapter 3: Applying Excel: Enter A Formula Into Each of The Cells Marked With A ? Below

This document contains information about unit sales, prices, variable and fixed expenses to calculate key metrics for a company's cost-volume-profit (CVP) analysis. It provides the data to compute the contribution margin ratio, variable expense ratio, break-even point in units and dollars, margin of safety in dollars and percentage, and degree of operating leverage.

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Bana Khafaf
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81 views1 page

Chapter 3: Applying Excel: Enter A Formula Into Each of The Cells Marked With A ? Below

This document contains information about unit sales, prices, variable and fixed expenses to calculate key metrics for a company's cost-volume-profit (CVP) analysis. It provides the data to compute the contribution margin ratio, variable expense ratio, break-even point in units and dollars, margin of safety in dollars and percentage, and degree of operating leverage.

Uploaded by

Bana Khafaf
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
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Chapter 3: Applying Excel

Data
Unit sales 20,000 units
Selling price per unit $60 per unit
Variable expenses per unit $45 per unit
Fixed expenses $240,000

Enter a formula into each of the cells marked with a ? below


Review Problem: CVP Relationships

Compute the CM ratio and variable expense ratio


Selling price per unit $60 per unit
Variable expenses per unit $45 per unit
Contribution margin per unit $15 per unit

CM ratio 25%
Variable expense ratio 75%

Compute the break-even


Break-even in unit sales 17,500 units
Break-even in dollar sales $1,050,000

Compute the margin of safety


Margin of safety in dollars $240,000
Margin of safety percentage 20%

Compute the degree of operating leverage


Sales $1,200,000
Variable expenses $900,000
Contribution margin $300,000
Fixed expenses $240,000
Net operating income $60,000

Degree of operating leverage 5

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