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  • Sep 7, 2007, 11:43 AM
    ekp131
    CVP Analysis
    sells hand-woven blankets for an average price of $30 per blanket. He buys the blankets from weavers at an average cost of $21. In addition, he has selling expenses of $3 per blanket. He rents the for $300 per month and pays one employee a fixed salary of $500 per month.

    1.Determine the number of blankets to sell to break even.

    2.Determine the number of blankets to sell to generate a profit of $1,000 per month.

    3.Assumming that he can sell his own blankets at a total variable cost of $16 per blanket, but that he would need to hire one additional employee at a monthly salary of $600.

    A. Determine the number of blankets to sell to break even.
    B. Determine the number of blankets to sell to generate a profit of $1,000 per month.

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