Fifth edition Alnoor Bhimani Charles T. Horngren Srikant M. Datar Madhav V. Rajan Farah Ahamed

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Solutions to exercises 8.12 CVP, changing revenues and costs. (15–20 min) 1

8.9
A company with multiple products can compute a breakeven point by assuming there is a constant mix of products at different levels of total revenue.
8.10
An increase in the income tax rate does not affect the breakeven point. Operating income at the breakeven point is zero and thus no income taxes will be paid at this point.
Solutions to exercises
8.12
CVP, changing revenues and costs.
(15–20 min)
1
USP
= 8% × €1,000 = €80
UVC = €35 (€17 + €18)
UCM = €45
FC
= €22,000 a month
a
FC
€22,000
=
=
UCM
45
Q
= 489 tickets (rounded up)
b
FC + TOI
€22,000 + €10,000
=
=
UCM
€45
Q
=
€32,000
€45

= 712 tickets (rounded up)
2
USP
=
€80
UVC
=
€29 (€17 + €12)
UCM = €51
FC
=
€22,000 a month
a
FC
€22,000
=
=
UCM
€51
Q

= 432 tickets (rounded up)
b
FC + TOI
€22,000 + €10,000
=
=
UCM
€51
Q

€32,000
€51
=

= 628 tickets (rounded up)

Bhimani, Horngren, Datar and Rajan, Management and Cost Accounting, 5
th
Edition, Instructor’s Manual
© Pearson Education Limited 2012

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