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  Assignment – 2 (CVP Analysis Solutions) Tauseef Ahmed Qureshi

 Problem No 1

Commission (SP) = $ 80 ( 8% commission of ticket price)VC = $ ! ( $"8 #eier& char!'es $" *isc cost)+C = $ ,,-000 per month. /C* = $ 80 $ ! = $ 1!

". (a) 23P = $,,-000 4 $1! = 185 tickets(6) Qt& = ( $,,-000 $"0-000) 4 $1! = ", tickets

,. #eier& char'es chan'es to $", per ticket7e VC = $", $" = $,5/C* = 80 9 ,5 = $!"

(a) 23P = $,,-000 4 $!" = 1, tickets(6) Qt& = ( $,,-000 $"0-000) 4 $!" = :,8 tickets

. CA chan'es its commission structure. /p to ticket price $:00 8 %comm.. +or tickets ; :00 $18 <ed7e /C* = $18 9 ,5 = $"5

(a) 23P = $,,-000 4 $"5 = ""!8 tickets(6) Qt& = ( $,,-000 $"0-000) 4 $"5 = ":8! tickets

Problem No 2

SP = $ 0 VC = $"5.! ".!0 = $," /C* = 0 ," =$5+C = :0-000,00-00080-000,0-000 = $:0-000".

 (a) 23P = $:0-000 4 $5 = 10-000 pairs(6) 10-000 > $0 = $ "-,00-000

,. ?peratin' income = (!-000 > $0) 9 (!-000 > $,") $:0-000= $ (1-!00)

. +C = :0-000 8"-000 = $11"-000 VC = $"5.!0 /C* = 0 9 "5.!= $"0.!0  23P = 11"-000 4 "0.!0 = 1,-000 pairs

1. +C = :0-000 VC = ," 0.0 = $,".0 /C* = 09 ,".0 = $ 8.0  23P = :0-000 4 8. = 1"-80 pairs > $0 = $ "-,1"-100.

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!. 23P = 10-000 pairs as (")  ?@=(!0-000 > $0) 9 (!0-000 > $"5.!0) 9 (!0-000 > ".!) 9 ("0-000 >0.0) $:0-000

= $ 8-000Problem No 3

+C = 1000000,000"000000,000 = $"!-000VC = $,! (meas drinks) ! (6inder and photocop&)SP = $,:0 /C* = ,:0 :0 = $,00

". (a) 23P = "!-000 4 ,00 = ! attendees(6) +C = "!-000 9 000,-000 = $ "0-000  23P = "0-000 4 ,00 = !0 attendees

,. ?@ = $,:0 7 $:0 7 $"0-000

"55 7=:0 ?@ = "!-:00 -:00 "0-000 = $,-000 !0% $"-000"558 7=50 ?@ = ,-100 !-100 "0-000 = $8-000 !0% $1-000"555 7="80 ?@ = 1:-800 "0-800 "0-000 = $,:-000 !0% $"-000

Problem No 4

". Bet Q = 7um6er of units of #eue product to 23  Bet Q = 7um6er of units of Standard product to 23

eenue 9 VC 9 +C = ?@(Q > $,0 Q >0) 9 (Q > $"1 Q > $"8) "-,00-000 = 0  0 Q = $"-,00-000

  Q = 10-000 units of #eue  Q = ",0-000 units of Standard

,. /C* ( Std) = ,0 9 "1 = $ :/C* ( #eue) = 0 9 "8 = $ ",

@f on& Std are sod 23 = "-,00-000 4 : = ,00-000 units@f on& #eue are sod 23 = "-,00-000 4 ", = "00-000 units

. ?@ = "80-000>$: ,0-000 >", 9 "-,00-000 = $",0-000

1. Bet Q = 7um6er of units of #eue product to 23  Bet 5Q = 7um6er of units of Standard product to 23

eenue 9 VC 9 +C = ?@

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(5Q > $,0 Q >0) 9 (5Q > $"1 Q > $"8) "-,00-000 = 0  Q = "8-"8, (#eue)  5Q = "8-"8, > 5 = ":-:8 (Standard)

23P = ":-:8"8-"8, = "8"-8,0 units

Problem No 5

3enDo (infant car) C* = !00 = $ 0+C = $ 15!-000

". 23P 9 Eear ,000 = 15!-000 4 0 = ":-!00 units

2. ide (infant car) C* = ,!"! = $ "03enkee epects to se units of 3enDo to , units of ide

  C* for 6unded produces = $0> $"0>, = $""0  Saes for 6unded products = $!0> $,!>, = $,00

  23P = 15!-000 4 ""0 = 1-!00 6unded

  3enDo = 1-!00 > = "-!00 units >$!0 = :!-000  ide = 1-!00 >, = 5-000 units >$,! = ,,!-000 

. C* % in ,-000 = $0 4 $ !0 = :0%C* % in ,-00" = $"00 4 $ ,,0 = !!%

23P in &ear,00" increases 6ecause +C are same in 6oth &ears.2ut the C* 'enerated 6& each doar of saes reenue at the'ien product mi decreases in ,00" reatie to &ear ,000.

Problem No 6

". ?@ = e 9 VC 9 +C  = !00-000 9 ( ,0-000>".!) 9 "!-000= $50-000  = 50-000(50-000>0.1) = $!1-000 

,.   23P= ,0-000 4 (,!".!) = ,1-000 /nits

. 7@ = e 9 VC 9 +C  F 4 0.: = !!0-000 9 (,,-000>".!) 9 ("!-000""-,!0)

  ?@ = $:0-!0

1. 23P= "1:-,!0 4 (,!".!) = "-000 /nits

!. ,!Q 9 ".!Q 9("!-000""-,!0) = !1-000  Q = ,"-000 units

  eenue = ,"-000 >$,! = $!,!-000

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:. (,,000>,!) 9(,,-000>".!) 9("!-000 F ) = :0-000 4"0.1  F = $",!-000

Problem No 7

SP = $ 8.00

A. Tota Saes = ,10-00010-000",0-000 = 100-000  % :0% "0% 0% "00%

C* % = (,10-000 "80-000) 4 ,10-000 = 0.,! > $8.00 = $,.00C* % = (10-000 ,0-000) 4 10-000 = 0.! > $8.00 = $1.00C* % = (",0-000 5:-000) 4 ",0-000 = 0., > $8.00 = $".:0

  Gei'hted Aera'e C* = 0.:0 > $, 0."0 > $1 0.0 > $".:0  = $ ,.08

  23P = $1-880 4 ,.08 = :-000 units  :-000>$8 = $,88-000

2. :-000 > :0% = ,"-:00 > $8 = ",-800 S :-000 > "0% = -:00 > $8 = ,8-800 T :-000 > 0% = "0-800 > $8 = 81-100

C. Gei'hted Aera'e C* = 0.0 > $, 0.10 > $1 0.0 > $".:0= $,.:823P = 80-100 4 ,.:8 = 0-000 units > $8 = $,10-000

  0-000 > 0% = 5-000 > $8 = ,-000 S 0-000 > 10% = ",-000 > $8 = 5:-000 T 0-000 > 0% = 5-000 > $8 = ,-000

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?peratin' epensesH  V. *arketin' and Admincosts

"-000

  +. *arketin' Admin -000(I)  Tota ?peratin' epenses ,0-000

  ?peratin' income $!-000Case 2

C$ %n"ome Statement

eenueV.Cost of 'oods sodH  #* ( 6e')  Purchased  #*(3nd)  #* /sed

  #B  V. *anufacturin'oerhead  V. *arketin' and Admincosts  Tota Varia6e costsContri6ution *ar'in+ied CostsH  +ied manufacturin' oerhead  +ied. *arketin' Admin

 Tota +ied costs?peratin' @ncome (oss)

23P = +C 4 C* % ::-:: = +C 4 0.0 +C= $ ,0-000

Con*entional %n"ome Statement

eenueCost of 'oods sodH  #* used  #B

  V. *anufacturin'oerhead  +. *anufacturin'oerhead  Cost of 'oods manufactured

  Jross *ar'in?peratin' epensesH

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  V. *arketin' and Admincosts  +. *arketin' Admin  Tota ?peratin' epenses  ?peratin' income

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