Students: Cristiana Rutia & Paola Kalim

Activity Class # 6
Cost-Volume-Profit

Exercise 6 - a)

Fixed cost goods sold 8,610,000

Fixed selling and making expenses 10,260,000
Total Fixed Costos 18,870,000

Sales Value 75,000,000 minus

Variable cost of goods sold 45,000,000 (Cost variable + commissions)
Contribution margin 30,000,000
Fixed cost 18,870,000 minus
Net Income 11,130,000

Contribution Margin ratio = 40%

Break Point Even = fixed Cost

Contribution margins ratio

Brenk Point Even = 18,870,000 =

40%

Exercise 6 - B
Fixed costs of good sold 8,610,000
Fixed selling and marketing expesnes 10,260,000
Additional fixed cost 7,500,000
Fixed cosots 26,370,000

Sales Value 75,000,000

Variable cost of goods sold 31,500,000
Variable selling comissions 6,000,000
Contribution margin 37,500,000
Contribution margin ratio = 50%

Break Point Even = fixed Cost

Contribution margins ratio

Brenk Point Even = 26,370,000 =

50%
Exercise 6 - C

Partriculars Sales Agent Own Sales

Sales Value 75,000,000 75,000,000
Contribution margin ratio = 40% 50%
Contribution margin 30,000,000 37,500,000
Fixed Cost 18,870,000 26,370,000
Operation Income 11,130,000 11,130,000

Degree of operting leverage = Contribution margin

operating income

Degree of operting leverage = 30,000,000 37,500,000

11,130,000 11,130,000

Degree of operting leverage = 2.70 3.37

Sales agents:
Advantages: Lower fixed costs, potential wider market reach
Disadvantage: Higher variable costs limited control

Own sales staff

Advantages: Lower variable costs, more control
Disadvantage: Higher intitial fixed costs, transition challlenger.

Exericse 6 - D
S= sales volume
0.18s=0.08s + 7,500,000
.10s = $ 7,500,000
s= $ 7,500,000
0.10

Estimate Sales is $ 75,000,000

nts: Cristiana Rutia & Paola Kaliman

t variable + commissions)

Contribution margin / sales

47,175.000

52,740,000