Gretchen and Michaela) made several changes in an effort to revitalize the store. The first decision was to move the stores location‚ expanding it by 50% more space and selling staff. This resulted in a five-year lease as well as a year to complete the expensive renovations. They also made some changes in product offerings and offered more sales potential at the cost of minor reductions in margins.
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To: Vice President It would be in Competition Bikes‚ Inc.’s best interest to change from a traditional costing system to an activity-based costing system. In this summary you will find information as to why this change is important as it will highlight the differences between traditional based costing and activity based costing systems. This summary will also give you further findings on Competition Bikes‚ Inc. breakeven point when evaluating the sales units and the sales dollars and also the
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organisations with diverse products and services will use just a single cost driver to absorb overheads‚ which leads to distorted cost estimations. Also by excluding certain non-production costs in absorption costing‚ management can make uninformed decisions. However Absorption costing is very easy and affective to implement for companies that provide only one product. As ‘Creations’ has 2 productions‚ ABC can give managers a “clear picture of how products brands‚ customers‚ facilities‚ regions‚ or distribution
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Sample Question 5312 Fall 2009 Student:___________________________________________________________________ 1. Corporate governance include concerns about: A. business ethics and social responsibility. B. the responsibilities of the board of directors. C. equitable treatment of stakeholders. D. disclosures and transparency. E. all of the above. 2. The most powerful corporate governance legislation to date has been: A. the Sarbanes-Oxley Act (SOX) of 2002. B. the creation
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d. to purchase grapes instead of mosto or bulk wine to ensure the quality of the product. A. The presentation below shows the Income Statement using the contribution margin approach to have a better view on the costs which are variable and fixed AZIENDA VINICOLA ITALIANA Income Statement (Contribution Margin Approach) For the Year 1993 Production Capacity – 871‚850 bottles Unit Cost In Lire
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Analysis | Cadman Food Processors | Submitted To: Professor D. Cook Submitted By: Group 3 Executive Summary The VP of Operations of Cadman Foods faces the decision of having to allocate three million pounds of tomatoes to the production of canned whole tomatoes‚ tomato juice or tomato paste. Subsequent to that decision‚ the VP needs to determine whether to acquire 80‚000 pounds of additional “A” quality tomatoes at $0.425 per pound. Bill Cooper‚ the Controller at Cadman Foods has recommended
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205 hours 138 hours 343 hours 205 * $400 = $82‚000 138 * $800 = $110‚400 Contribution Margin Income Statement Intra-comp sales $82‚000 Commercial sales $110‚400 Total Revenue $192‚400 Less Variable costs Operations hourly wage ($24*343) $8‚232 Sales Promotions ($4.70*343) $1‚612 $9‚844 Contribution Margin $182‚256 Less Fixed costs Space costs $9‚240 Equipment costs
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versus the number sold do not affect the per unit product cost. * Marginal costing statements are easily understandable for profit planning because they follow managements decision making process more closely than do full cost statements. * Marginal costing statements allow a more objective appraisal of income contribution of different products. * Calculation of product cost is more convenient‚ accurate and reliable by using marginal costing statements‚ because the basis to allocate fixed
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volume or level of activity 3. per unit variable costs 4. total fixed costs 5. mix of products sold Unit Contribution Margin: p – v Total Contribution Margin: (p - v) *Q Contribution Margin Ratio: (p-v) /p Breakeven Point: The point at which revenues equal total cost‚ and the profit is zero. * Equation Method: p*Q = f + v*Q * Contribution Margin Method Breakeven in Units: Q = f / (p-v) (Fixed expenses / CM per unit) Breakeven in Dollars: Y = p*Q = p*f / (p-v)
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sales manager is right‚ what will be the effect on the company’s monthly net operating income or loss? (Use the incremental approach in preparing your answer.) Requirement 2 (continued) Incremental method Variable expense ($14 per unit) Contribution Margin $340‚000 Sales increased 238‚000 VE increased 102‚000 CM increased Fixed Expenses 98‚000 Net Operating Income $4‚000 Sales (17000 units x 20) $70‚000/20 = 3500 units $189‚000/13500 = $14 per unit $90‚000 + 8‚000= $98‚000 $70‚000 49‚000
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