# Using Cost-Volume-Profit Formulas. MURDER TO GO! Writes and manufactures murder mystery parlor games

April 14, 2018

EXERCISE 20.7: Using Cost-Volume-Profit Formulas.MURDER TO GO! Writes and manufactures murder mystery parlor games that it sells to retailUsing Cost-Volume-Profit Formulas. The following is per-unit information relating to themanufacture and sale of this product:Unit sales price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . \$ 30Variable cost per unit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6Fixed costs per year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 360,000Determine the following, showing as part of your answer the formula that you used in yourcomputation.For example, the formula used to determine the contribution margin ratio (part a ) is:Contribution Margin Ratio = Unit Sales Price – Variable Costs per UnitUnit Sales Pricea. Contribution margin ratio.b. Sales volume (in dollars) required to break even.c. Sales volume (in dollars) required to earn an annual operating income of \$440,000.d. The margin of safety (in dollars) if annual sales total 60,000 units.e. Operating income if annual sales total 60,000 units.

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