ACCT 2102 1st Edition Lecture 21 Outline of Last Lecture I Practice Problem 1 II Practice Problem 2 Outline of Current Lecture III Practice Problem 2 continued Current Lecture Cost Volume Profit Analysis Part III Chapter 7 III Practice Problem 2 Continued from Lecture 20 6 MONTHS LATER Since sales have been going so well Daisy is considering raising the price from 60 to 70 However she is afraid her volume will drop off 5 from the current volume of 300 units per month If she raises the price and is correct about the change in volume what will happen to her operating income These notes represent a detailed interpretation of the professor s lecture GradeBuddy is best used as a supplement to your own notes not as a substitute ONE YEAR LATER Assume Daisy didn t change the price Daisy has decided to add another product to her business The Kitty catnip toy will have a contribution margin of 15 per unit Daisy expects to sell 40 doggie treat dispensers for every 10 kitty catnip toys What is the expected weighted average contribution margin Given the anticipated sales mix how many of each product will Daisy have to sell to breakeven Go back to the original data one product Let s say Daisy had been given the option of paying for the web page design and maintenance either as 1 a fixed cost of 1 200 per month OR 2 as 15 of sales revenue At what point in sales volume would she be indifferent between the two options If sales volume is expected to be HIGHER than the indifference point which option would she prefer
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