Recommendation I recommend that proposal 2 should be chosen‚ because it has maximum profit. It also has the best margin of safety and contribution/sales ratio. In proposal 2‚ an additional product W is added to the mix. So the fixed cost is increased. Although the fixed cost is increased‚ the profit increases sharply. What is noteworthy is that breakeven point is the largest in the 3 situations. It means that the company should take longer time to reach the breakeven point. So the company many
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Total Fixed Cost $3‚250 $3‚353 $5‚011 Breakeven point in number of sales tickets Breakeven Point = Total Fixed Cost / (Contribution Margin/ Units) 2003 = $3250 / ($3828/5341) = 4535 2004 = $3353 / ($3565/5316) = 5000 2006 = $5011 / ($4605/6897) = 7505 Breakeven point in sales dollars 2003 = breakeven point in units* price per unit = 4535*$1607=$7287745 2004 = 5000*$1524=$7620000 2006 = 7505*$1553=$11655265 Margin of safety in % 2003 = (Budgeted Sales - Breakeven Point in Dollars)/ Budgeted Sales =
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foot traffic and jewelry buyers. Michaela’s and Gretchen’s challenge is to determine a way to return to profitably all while not eliminating commission based pay; a strategy that their father and grandfather were totally against. RECOMMENDATION: The recommendation for the managers at Hallstead would be to perform a marketing analysis of their customer base to determine its buying power. It would also be a good idea for the managers to get a better understanding of who their competitors’ are to
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Submitted by Yellow Team Eunice King Ronda Klassen Joshua Krupnick Larry McCraw Ronald Mills BUS 5431 Managerial Accounting Professor Nancy Shoemake April 18‚ 2010 1.0 Summary Hallstead Jewelers was one of the largest jewelry and gift stores in the United States for 83 years. Customers came from throughout the region to buy from extensive collections in each department. Any gift from Hallstead’s had an extra cache attached to it as they were known for having the best. Even
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Analyze and Qualify Traffic sectors of the inbound marketing industry. Our recommendation is based on quantitative analysis which showed that the OO segment is more profitable than the MM segment. Considering the $1000 acquisition cost of OOs and their current pricing‚ the breakeven for this segment is 2 months. In addition‚ the lifetime revenue for the OOs is estimated to be $1.3M (Exhibit B). In contrast‚ the breakeven time calculated for the MMs is 9 months with an estimated lifetime revenue
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Economic Feasibility Analysis worksheets. I have compiled the information that you provided into several useful and easy to read charts‚ diagrams‚ and explanations. In this memorandum you will find a summary of breakeven points using discount rates of 8‚ 10‚ 12‚ 14‚ and 16 percent‚ a breakeven chart comparing the net present value of all benefits to the net present value of all costs‚ and the internal rate of return. I also provide analysis of a couple of different scenarios‚ for example‚ a scenario
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Context 1 Case Background 1 Cost-Volume-Profit Analysis 1 Point of View 1 Problem Statement 1 Areas of Consideration 2 The Breakeven Point 2 Implicit Assumptions and Limitations 2 Per Product versus Aggregate Breakeven Point 2 Change in Volume and Fixed Cost 3 Change in Product Mix and Sales Price 3 The Bonus Dividend Plan 3 Union Demand 4 Change in Product Emphasis 4 Recommendations 5 Revised CVP Income Statement 5 Required Levels of Operation 6 Case Context Case Background The case of Bill French is
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project to build an Ambulatory Surgical Center(ASC) This report utilizes the base case analysis‚ worse case analysis and best case analysis feeling these analyses are sufficient‚ while many analyses may be of interest‚ they could confuse the recommendations and strategic value of the project. In preparation the board would be told that calculating multiple NPVs for multiple inflationary rates for labor cost and supply cost would further confuse the issue. The information presented the NPV‚ IRR‚ MIRR
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seven-years old. 2. Mark Thomas‚ assistant director of the Abbington Youth Center‚ instructs the program directors with his breakeven analysis. He calculated the following results by using average method: * Each student contributed $4‚348 to fixed costs * 115 students are the breakeven point 3. The current Abbington’s programs enrollment is exactly at breakeven‚ so Mr. Thomas encourages the program directors to expand the size of their programs to increase margin. However‚ they come
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SOVEREIGN LODGE 1]. List all the relevant decision alternatives in Mr.Kacheck’s proposal. The relevant decision alternatives in Mr. Kacheck’s proposal are listed below... OPTION 1: Open in summer without advertisement. OPTION 2: Open in summer with advertisement. OPTION 3: Open with pool‚ no bubble and with the Advertisement. OPTION 4: Open with pool‚ bubble and with the Advertisement.
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