Cost-Volume-Profit Analysis Calculation, accounting homework help

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Steve Smith is ready to complete a cost-volume-profit analysis for the current year for the U.S. chocolate bar manufacturing plant to determine if the break-even point is achieved. Specific costs for production of 400,000 units include the following:

Swiss Chocolate Manufacturing Company

Variable Costs Total

Fixed Costs Total

Raw materials

200,000

Direct manufacturing labor

100,000

Indirect manufacturing labor

52,500

Factory insurance and utilities

31,500

Depreciation — machinery and factory

38,500

Repairs and maintenance — factory

14,000

Selling, marketing, and distribution expenses

20,000

40,000

General and administrative expenses

60,000

There are no beginning or ending inventories. The total sales for 400,000 units produced are $1,050,000.
Answer the following questions given the fact pattern above, showing all calculations.

  • What is the contribution margin per unit for each chocolate bar produced given the fact pattern above?
  • What is the Swiss Chocolate’s U.S. division breakeven point in units and dollars given the fact pattern above?
  • What is the Swiss Chocolate’s U.S. division margin of safety and degree of operating leverage given the fact pattern above?
  • Assume the fact pattern above changes. Swiss Chocolate would like to hire another salesperson at a fixed salary of $40,000 per year to focus primarily on marketing through social media. In addition, a drought in Brazil has resulted in higher costs for its major raw material, cacao; raw material costs will increase 5 cents per unit. Finally, the U.S. division’s parent in Switzerland has indicated that its forecast target net income for the year is $150,000. What is the level of sales in units and dollars required to achieve this targeted level of net income? Assume a 30% tax rate.
  • What cost increases, fixed or variable, result in the greatest challenge in realizing a desired level of profit? In the context of Swiss Chocolate, explain your answer.

Your paper should meet the following requirements:

  • 3-4 pages in length including calculations
  • Formatted according to APA requirements
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