1. If a company has a contribution margin ratio of 40% and hopes to increase sales revenue by $100,000, what would be the increase to net income? (hint: sensitivity analysis)

2. If a company has a sales price of $24, a variable cost per unit of $12 and fixed costs of $4 per unit, what is their contribution margin ratio?

3.Selling price is $160, unit variable cost is $96, and fixed costs are $3,200,000. Unit sales required to break even are:


Which of the following is NOT a key assumption of CVP analysis?

All costs are classified as fixed or variable.

There are multiple cost drivers: both units and sales dollar volume.

The analysis is for a single product, or the sales mix of multiple products is constant.

The total cost function is linear within the relevant range.