Hsm/260 Week 4 Checkpoint
Ratios over Time
9/2/2013
Ratios over Time
The financial position of this organization has changed in multiple ways. First being that the company has increased their profit and lowered their expenses. Generally it has improved. The contribution ratio has also lowered explaining that their company is not putting in as much of their own money as in the fiscal year 2000. The revenue ratio has also gone down. This is because they are making a profit with fewer expenses
Part 2
What are the variable costs?
Meals the high and low $4,900 - $3,500 =1,400
Cost the high and low $26,000.00 - $20,500.00 = $5,500.00
The variable cost per meal is $5,500 divided by $1,400 which is $3.93.
The variable cost for the low month is $5,500 multiplied by $3.93which is $13,755.00.
What are the fixed costs?
The total fixed cost is subtracting the variable from low time period: $20,500 - $13,755.00 = $6,745
How many meals will the WHDM program need to provide during the fiscal year to reach the BEP?
PX = A + BX
5.77 X = 6,745 +3.93 X
5.77 − 3.93 = 6,745 + (3.93 − 3.93)
1.84 X = 6,745
1.84 X ÷ 1.84 X = 6,745 ÷ 1.84 X
X = 3,666 (Monthly BEP) 3,666 * 12 = 43,992 (Fiscal-year
BEP)
How much profit will the program earn if it completes its 45,000-meal contract with the City of Westchester?
WHDM program profit analysis 45,000 = meal contract
Break Even Point (BEP) = $43,992
1,008 Revenue
1,008 Meals at $5.77= $5,816.16
Total Cost per meal 1,008 at $3.93 =$3,961.44
Total Profit = $5,816.16 − $3961 .44 = $1,854
9/2/2013
Ratios over Time
The financial position of this organization has changed in multiple ways. First being that the company has increased their profit and lowered their expenses. Generally it has improved. The contribution ratio has also lowered explaining that their company is not putting in as much of their own money as in the fiscal year 2000. The revenue ratio has also gone down. This is because they are making a profit with fewer expenses
Part 2
What are the variable costs?
Meals the high and low $4,900 - $3,500 =1,400
Cost the high and low $26,000.00 - $20,500.00 = $5,500.00
The variable cost per meal is $5,500 divided by $1,400 which is $3.93.
The variable cost for the low month is $5,500 multiplied by $3.93which is $13,755.00.
What are the fixed costs?
The total fixed cost is subtracting the variable from low time period: $20,500 - $13,755.00 = $6,745
How many meals will the WHDM program need to provide during the fiscal year to reach the BEP?
PX = A + BX
5.77 X = 6,745 +3.93 X
5.77 − 3.93 = 6,745 + (3.93 − 3.93)
1.84 X = 6,745
1.84 X ÷ 1.84 X = 6,745 ÷ 1.84 X
X = 3,666 (Monthly BEP) 3,666 * 12 = 43,992 (Fiscal-year
BEP)
How much profit will the program earn if it completes its 45,000-meal contract with the City of Westchester?
WHDM program profit analysis 45,000 = meal contract
Break Even Point (BEP) = $43,992
1,008 Revenue
1,008 Meals at $5.77= $5,816.16
Total Cost per meal 1,008 at $3.93 =$3,961.44
Total Profit = $5,816.16 − $3961 .44 = $1,854