Basic Decision Analysis Using CVP Derby Phones is considering the introduction of a new model of headphones with the following pri


Unit 3 Assignment: Chapter 3 Connect Homework

LO 3-1) 3-29. Basic Decision Analysis Using CVP

Derby Phones is considering the introduction of a new model of headphones with the following price and cost characteristics.

Sales price    $ 270 per unit

Variable costs     120 per unit

Fixed costs   300,000 per month


a. What number must Derby sell per month to break even?

b. What number must Derby sell to make an operating profit of $180,000 for the month?

(LO 3-1) 3-30. Basic Decision Analysis Using CVP

Refer to the data for Derby Phones in Exercise 3-29. Assume that the projected number of units sold for the month is 5,000. Consider requirements (b), (c), and (d) independently of each other.


a. What will the operating profit be?

b. What is the impact on operating profit if the sales price decreases by 10 percent? Increases by 20 percent?

c. What is the impact on operating profit if variable costs per unit decrease by 10 percent? Increase by 20 percent?

d. Suppose that fixed costs for the year are 20 percent lower than projected, and variable costs per unit are 10 percent higher than projected. What impact will these cost changes have on operating profit for the year? Will profit go up? Down? By how much?

(LO 3-4) 3-63. Extensions of the CVP Model—Multiple Products

On-the-Go, Inc., produces two models of traveling cases for laptop computers—the Programmer and the Executive. The bags have the following characteristics.

Programmer Executive

Selling price per bag  $70  $100

Variable cost per bag  $30  $40

Expected sales (bags) per year  8,000  12,000

The total fixed costs per year for the company are $819,000.


a. What is the anticipated level of profits for the expected sales volumes?

b. Assuming that the product mix is the same at the break-even point, compute the break-even point.

c. If the product sales mix were to change to nine Programmer-style bags for each Executive-style bag, what would be the new break-even volume for On-the-Go?

Our website has a team of professional writers who can help you write any of your homework. They will write your papers from scratch. We also have a team of editors just to make sure all papers are of HIGH QUALITY & PLAGIARISM FREE. To make an Order you only need to click Ask A Question and we will direct you to our Order Page at WriteDemy. Then fill Our Order Form with all your assignment instructions. Select your deadline and pay for your paper. You will get it few hours before your set deadline.

Fill in all the assignment paper details that are required in the order form with the standard information being the page count, deadline, academic level and type of paper. It is advisable to have this information at hand so that you can quickly fill in the necessary information needed in the form for the essay writer to be immediately assigned to your writing project. Make payment for the custom essay order to enable us to assign a suitable writer to your order. Payments are made through Paypal on a secured billing page. Finally, sit back and relax.

Do you need an answer to this or any other questions?