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Cpv analysis case solution

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Efni Yulianti

The document summarizes production and sales data for two candy products: chocolate candy and coffee candy. It calculates the break-even point in units to be 332,273 based on total fixed costs of $7.75 million and total contribution margin of $22,000. It then determines the sales mix needed for each product to reach the break-even point and calculates sales volumes, revenues, costs, and margins. The document also calculates the company's tolerance for decreases in sales before losses are incurred, which is 22.11% below expected sales volume.

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GROUP 6
Chocolate Candy Coffee Candy Production Sales 3.000.000 packs 3.000.000 packs 2.000.000 packs 3.000.000 packs Production cost Direct materials cost $1.5 $ 1.25 Direct labor cost 1 1 Variable factory OH cost Fixed factory OH cost Total cost Variable marketing & adm Fixed cost Direct fixed cost Common fixed cost Both candy 6.500.000 0.5 0.75 $ 3.75 $ 2 $ 750.000 0.25 0.5 $ 3 $ 1 $ 500.000
Chocolate candy sales Coffee candy 3.000.000 = 3/2 2.000.000
product Price/uni t Variable cost Contribution margin Sales mix Total CM Chocolate candy $ 10 5 5 3 15 Coffee candy TOTAL $15 4 3.5 2 7 22 BEP=TOTAL FC = (750.000+500.000+6.500.000) = 7.750.000= 332.273 pc TOTAL CM 22 22 SALES BEP CHOCOLATE CANDY = 3 x 332.273 = 1.056.819 pc COFFEE CANDY = 2 x 332. 273 = 704. 346 pcSales mix
BEP = Total FC + Targeted profit bf tax CM/unit = (7.750.000 + 2.200.000)/22 =9.950.000/22= 452.273 pc Chocolate candy = 1.356.819 pc 3 x 452.273 Coffee candy = 904.546 pc 2 x 452.273
CHOCOLATE CANDY COFFEE CANDY TOTAL SALES 10.568.190 5.284.095 15.852.285 VARIABLE COST (5.284.095) (2.818.184) (8.102.279) CONTRIBUTION MARGIN 5.284.095 2.465.911 7.750.006 LESS DIRECT FIXED COST (750.000) (500.000) (1.250.000) PRODUCT MARGIN 4.534.095 1.965.911 6.500.006 COMMON FIXWD COST (6.500.000) OPERATING INCOME 0
In Pack = 22.11 % x 452. 2773 = 99.998 packs Its mean if the salesvolume decrease 22.11 % of the expected volume then sales will bw break even point . In other word a decrease in sales that can still be tolerated so company not get loss as high MoS = Xe-Xb x 100% Xe = (452.273-352.273) x 100% 423.273 =22.11 %

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Cpv analysis case solution

  • 2. Chocolate Candy Coffee Candy Production Sales 3.000.000 packs 3.000.000 packs 2.000.000 packs 3.000.000 packs Production cost Direct materials cost $1.5 $ 1.25 Direct labor cost 1 1 Variable factory OH cost Fixed factory OH cost Total cost Variable marketing & adm Fixed cost Direct fixed cost Common fixed cost Both candy 6.500.000 0.5 0.75 $ 3.75 $ 2 $ 750.000 0.25 0.5 $ 3 $ 1 $ 500.000
  • 3. Chocolate candy sales Coffee candy 3.000.000 = 3/2 2.000.000
  • 4. product Price/uni t Variable cost Contribution margin Sales mix Total CM Chocolate candy $ 10 5 5 3 15 Coffee candy TOTAL $15 4 3.5 2 7 22 BEP=TOTAL FC = (750.000+500.000+6.500.000) = 7.750.000= 332.273 pc TOTAL CM 22 22 SALES BEP CHOCOLATE CANDY = 3 x 332.273 = 1.056.819 pc COFFEE CANDY = 2 x 332. 273 = 704. 346 pcSales mix
  • 5. BEP = Total FC + Targeted profit bf tax CM/unit = (7.750.000 + 2.200.000)/22 =9.950.000/22= 452.273 pc Chocolate candy = 1.356.819 pc 3 x 452.273 Coffee candy = 904.546 pc 2 x 452.273
  • 6. CHOCOLATE CANDY COFFEE CANDY TOTAL SALES 10.568.190 5.284.095 15.852.285 VARIABLE COST (5.284.095) (2.818.184) (8.102.279) CONTRIBUTION MARGIN 5.284.095 2.465.911 7.750.006 LESS DIRECT FIXED COST (750.000) (500.000) (1.250.000) PRODUCT MARGIN 4.534.095 1.965.911 6.500.006 COMMON FIXWD COST (6.500.000) OPERATING INCOME 0
  • 7. In Pack = 22.11 % x 452. 2773 = 99.998 packs Its mean if the salesvolume decrease 22.11 % of the expected volume then sales will bw break even point . In other word a decrease in sales that can still be tolerated so company not get loss as high MoS = Xe-Xb x 100% Xe = (452.273-352.273) x 100% 423.273 =22.11 %