Cost, Volume, Profit (CVP) Analysis Bob begins his own businesich he can buy widgets for...
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Cost, Volume, Profit (CVP) Analysis Bob begins his own businesich he can buy widgets for $80 each and sell each for a price of $175. In orde to the public Bob needed to rent space in a local building down on Main street he rent cost's Bob $1,170 per month. In addition Bob has hired a salesman, Mike, to sell the widgets for him (while he vacations). Bob wants to encourage Mike to sell as many widgets as he can so he pays Mike on commission. For every widget Mike sells Bob will pay him $30. 1. Please set up an Excel spreadsheet which will calculate the number of widgets Bob must sell in order to breakeven. (Remember there are two variable costs) 2. How much does that translate to in sales revenue (that is the amount of sales dollars to breakeven)? I 3. How much is Bob's contribution margin per widget? 4. If Bob is not happy unless he makes $6,500 profit per month, how many widgets must Mike sell? 5. How much will Mike receive at the breakeven point? 6. How much will Mike receive if he sells enough to make Bob happy (that is $6,500 profit)? Please deposit your completed spreadsheet in the drop-box with the name "Cost, Volume, Profit Analysis
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