1. Explain the importance of CM and how it can be used by companies to predict future income. Create some examples with numbers to show how it can be used(this area could be completed in excel).
Calculate Break-even in units and sales $ for the company
3. If the following changes were to be made, calculate a new CVP Income Statement: Direct Material costs decrease by 10%; fixed costs increase by 30% and sales price would increase by 5%. Assume you are selling the 800 units. Should the company consider these changes? Why or why not? What if the sales volume changes? Does this change your answer? Discuss real examples of cost increases for fixed costs (at least 2) and decreases for direct materials (at least 2) that could be implemented for this business. Can the company increase price? What other areas might be impacted due to the price increase? You are the CFO of this business what is important to consider? Give 2 industry specific details that can impact this discussion.