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Question by  joe16 (32)

# How do you compute the break even point and prepare a cvp income statement?

I need help in computing the break even point and preparing a cvp income statement.

 +1 vote! +5 you voted Answer by  McGaff (22) Breakeven point is found by taking fixed costs and dividing by your gross profit percentage (GPP). Fixed costs (FC) are those that don't change regardless of sales volume. GPP is found by taking the cost of goods sold and dividing it by the sales price. 10,000 in FC/50% GM equals 20,000 in sales to break even

 +1 vote! +4 you voted Answer by  Freddie12 (77) Break-even point is calculated in sales or units. Divide fixed costs by contribution margin expressed as a dollar amount for break-even units and by contribution margin expressed as percentage for break-even sales. Cost-volume-profit statement illustrates the relationship of item cost, quantity sold, and profit earned.

 +1 vote! +3 you voted Answer by  sini (34) (a) Prepare a CVP income statement for 2005 based on management's estimates. (b) Compute the break-even point in (1) units and (2) dollars (c) Compute the contribution margin ratio and the margin of safety ration. (Round to full percents) (d) Determine the sales dollars required to earn net income of \$190,000

 +1 vote! +0 you voted Answer by  gomezros (1) how to prepare an CVP income statement with some estimates