EM 505 - Decision Models‚ Fall 2012 Homework 3 - December 10-11‚ 2012 1. The diagram below depicts a system of aqueducts that originate at three rivers (nodes R1‚ R2 and R3) and terminate at a major city (node T) where the other nodes are junction points in the system. Using units of thousands of acre feet‚ the tables below show the maximum amount of water that can be pumped through each aqueduct per day and the following diagram shows the network of the system. From/To A R1 75 R2 40 R3 B 65 50 80
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considerations are measurement issues. Financial measures‚ in particular‚ cost measures‚ are needed to evaluate alternate strategies on whether to introduce a new product or service line‚ to determine the appropriate sale price and the consequent market position for the firm’s product. Question 1) “Contribution” represents the portion of sales revenue that is not consumed by variable costs and so contributes to the coverage of fixed costs. To compute profit contribution that can be earned by carrying 1
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Question4: What closing time should Citywide Spirits Shoppe choose to maximize profits? Through the Attachment: (Evening time) Contribution Margin = average purchase revenue-average purchase cost = $30.52-$23.25 = $7.27 per customer per purchase Average numbers of customer: (Attachment 2) close time averge customers Time Total customer 10pm 10.18 10pm~11pm 12 11pm 10.16 10pm~12pm 21 12pm 10.08 10pm~1am 27 1am 9.71 10pm~2am 32 2am 9.4 10pm~3am 36 3am 9.06 10pm~4am
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1: Score 0/4 Your response Exercise 5-1 Fixed and Variable Cost Behavior [LO1] Espresso Express operates a number of espresso coffee stands in busy suburban malls. The fixed weekly expense of a coffee stand is $1‚200 and the variable cost per cup of coffee served is $0.22. Requirement 1: Fill in the following table with your estimates of total costs and cost per cup of coffee at the indicated levels of activity for a coffee stand. (Round average cost per cup of coffee to 3 decimal places. Omit
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a single product. The product has a selling price of $40 per unit and variable expenses of $15 per unit. The company’s fixed expenses total $30‚000 per year. The company’s break-even point in terms of total dollar sales is: A) $100‚000. B) $80‚000. C) $60‚000. D) $48‚000. The answer is d. CMR = (P-V)/P = ($40 - $15)/$40 = 62.5% Px = F/ (CMR) Px = $30‚000/.625 = $48‚000 Use the following to answer questions 2-3: Weiss Corporation produces two models of wood chairs‚ Colonial and Early American. The
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the relevant cost is the cargo cost only. Therefore‚ profit contribution of carrying I ton of tapioca from Balik and Singapore: Expected revenue $5.10 Less freight cost (0.25+0.56) 0.81 Profit Contibution 4.29 From Singapore to Balik: Expected Revenue $2.70 Less freight cost (0.16+0.32+0
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Analysis Understand how cost behavior and cost-volume-profit analysis are used by managers. 2 Questions Addressed by CVP Analysis How much must I sell to earn my desired income? How will income be affected if I reduce selling prices to increase sales volume? What will happen to profitability if I expand capacity? 3 Cost-Profit-Volume Analysis What is cost-volume-profit analysis? It is the study of the effects of output volume on revenue (sales)‚ expenses (costs)‚ and net income (net profit)
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large company. Actual costs Static Incurred budget Activity level (in units) 800 750 Variable costs: Indirect materials $6‚850 $6‚600 Electricity $1‚312 $1‚275 Fixed costs: Administration $3‚570
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Chapter 7 - [ cost – volume – profit Analysis leverage ] Cost – Volume – profit Analysis {or Break ever analysis ) The break even point (BEP) man be defined as that level of sales at which total revenue in equal to total costs x the co will make no profit x also will have no loss. The volume of sales corresponding to BEP is known as break even output . If the co producer & sells less than the BE output it would in an a loss &if it producer &sells more than the BE output it
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1. (TCO F) Bingham Corporation uses the weighted-average method in its process costing system. Data concerning the first processing department for the most recent month are listed below. Work in process‚ beginning: Units in beginning work-in-process inventory | 400 | Materials costs | $6‚900 | Conversion costs | $2‚500 | Percentage complete for materials | 80% | Percentage complete for conversion | 15% | Units started into production during the month | 6‚000 | Units transferred to
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