8.13
CVP, changing revenues and costs.
(20 min)
1
Soleil charges €1,000 per round-trip ticket. Hence, each ticket will yield only a €48 commission. USP = €48
UVC
=
€29 (€17 + €12)
UCM = €19
FC =
€22,000
a
FC
€22,000
=
=
UCM
€19
Q
= 1,158 tickets (rounded up)
b
FC + TOI
€22,000 + €10,000
=
=
UCM
€19
Q
€32,000
€19
=
= 1,685 tickets (rounded up) The reduced commission sizably increases the breakeven point and the number of tickets required to yield a target operating income of €10,000:
8%
old commission
Upper limit on
commission of €48
Breakeven point
432 1,158 Attain OI
628 1,685
2
The €5 delivery fee can be treated as either an extra source of revenue (as done below) or a cost offset. Either approach increases UCM by €10: USP
=
€53 (€48 + €5)
UVC
=
€29 (€17 + €12)
UCM =
€24
FC
=
€22,000
a
FC
€22,000
=
=
UCM
€24
Q
= 917 tickets (rounded up)
b
FC + TOI
€22,000 + €10,000
=
=
UCM
€24
Q
€32,000
€19
=
= 1,334 tickets (rounded up) The €5 delivery fee results in a higher contribution margin which reduces both the breakeven point and the tickets sold to attain operating income of €10,000.
Bhimani, Horngren, Datar and Rajan, Management and Cost Accounting, 5 th Edition, Instructor’s Manual © Pearson Education Limited 2012 Share with your friends: |
