Module 4 Research Questions
Activity 4.4 - Assignment: Research Paper
Polaris offers extended service contracts that provide repair and maintenance coverage over its products. As you complete the following requirements, assume that the Polaris services department uses many of Polaris’s existing resources such as its facilities, repair machinery, and computer systems. Write a two-page report addressing the following topics:
1. Identify several of the variable, mixed, and fixed costs that the Polaris services department is likely to incur in carrying out its services.
2. Assume that Polaris's services revenues are expected to grow by 25% in the next year. How do you expect the costs identified in part 1 to change, if at all?
3. Based on your answer to part 2, can Polaris use the contribution margin ratio to predict how income will change in response to increases in Polaris's services revenues?
Use the following Research Paper Format:
Times New Roman, with 12-point font size
Double Spaced
1-inch report margins
Your Research Paper will be graded based upon the Writing Rubric (PDF) and receive a maximum of 100 points.
Variable costs:
A variable cost changes in proportion to changes in volume of activity. In this case _______ are variable costs to the Polaris company since these both costs will increase according to selling ________
Mixed costs:
Mixed costs include both fixed and variable cost components. In this case
Fixed costs:
Here depreciation of the building is the fixed cost, since this cost remains unchanged in amount when the volume of activity varies from period within a relevant range.
Some of the costs that the Polaris services department would incur in carrying out its services would be fixed, variable, mixed. During a conventional Cost-Volume-Profit analysis management would classify these costs in respect to production or sales volume. The following examples cover theses cost (Wild & Shaw, 2012):
Fixed: Some of the fixed cost would be management salaries, and rent on
Polaris offers extended service contracts that provide repair and maintenance coverage over its products. As you complete the following requirements, assume that the Polaris services department uses many of Polaris’s existing resources such as its facilities, repair machinery, and computer systems. Write a two-page report addressing the following topics:
1. Identify several of the variable, mixed, and fixed costs that the Polaris services department is likely to incur in carrying out its services.
2. Assume that Polaris's services revenues are expected to grow by 25% in the next year. How do you expect the costs identified in part 1 to change, if at all?
3. Based on your answer to part 2, can Polaris use the contribution margin ratio to predict how income will change in response to increases in Polaris's services revenues?
Use the following Research Paper Format:
Times New Roman, with 12-point font size
Double Spaced
1-inch report margins
Your Research Paper will be graded based upon the Writing Rubric (PDF) and receive a maximum of 100 points.
Variable costs:
A variable cost changes in proportion to changes in volume of activity. In this case _______ are variable costs to the Polaris company since these both costs will increase according to selling ________
Mixed costs:
Mixed costs include both fixed and variable cost components. In this case
Fixed costs:
Here depreciation of the building is the fixed cost, since this cost remains unchanged in amount when the volume of activity varies from period within a relevant range.
Some of the costs that the Polaris services department would incur in carrying out its services would be fixed, variable, mixed. During a conventional Cost-Volume-Profit analysis management would classify these costs in respect to production or sales volume. The following examples cover theses cost (Wild & Shaw, 2012):
Fixed: Some of the fixed cost would be management salaries, and rent on