Tom has recently started a toy business. If everything goes well, he hopes to make an operating income of 20,000. Tom makes and sells only one toy truck. He plans to sell each toy truck for $10 dollars. Tom has a variable cost of 5 dollars a toy and fixed costs of25,000. He is new to his business, so he is looking at different ways to map his costs. Tom has reached out to you for consulting. As a consultant firm write tom a memo letting him know his breakeven point, quantity of toys needed to be sold for desired operating income and describe ABC costing. Let him know if he should invest in such a system with his current business needs. If not, should he consider using such a system in the future? -Provide explanation of CVP analysis, breakeven point, activity-based costing with respective recommendations to Tom. -2 pages memo length (1000 words) -Include a self-made graph of CVP analysis.(Separate page-made by hand done neatly) -Be sure to reference this graph within your memo as exhibit 1. -Map both cost and revenue line, breakeven point, and desired profit point on graph.

sample memo Accounting CVP Memo Guidelines

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