making the venue and each event as profitable as possible‚ by making it as highly visible as possible. Working within an established marketing budget of $20‚000 per event‚ the team analyzes demographics‚ options‚ and potential ROI in order to make decisions about how to spend this money. Looking beyond each individual event‚ they are also looking to build visibility for the venue. However‚ in this case the strategy of differentiation should not work in a vacuum. Many experienced concert attendees
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included in the computation of contribution margin on page 33? 3. Perform two separate computation of Benetton’s break-even point in euros. For the first computation‚ use data from 2003.For the second computation‚ use data from 2004. Why do the numbers that you computed differ from one another? 4. What sales volume would have been necessary in 2004 for Benetton to attain a target income from operations of € 300 million? 5. Compute Benetton’s margin of safety using data from 2003
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Cost-Volume-Profit Analysis Self-Test Questions 1. The difference between the sales price and the total variable costs is the contribution margin. (D) 2. The breakeven volume in units (perfume sticks) for 2005 is TR-VC-FC=PBT MR=900000/1800 = 500 TR-VC-FC=0 VC/Q = 495000/1800 = 275 Q*MR - Q(VC/Q) = FC Q = _____FC_____ MR-VC/Q Q = 247500/(500 275) Q=1100 Therefore (B) 3. If sales volume is expected to be 2100 units with prices/costs same‚ after-tax net income is expected
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Wood Crafts‚ Inc. is a manufacturer of furniture for specialty shops throughout the Northeast and has an annual sales volume of $12 million. The company has four major product lines: bookcases‚ magazine racks‚ end tables‚ and bar stools. Each line is managed by a production manager. Since production is spread fairly evenly over the 12 months of operation‚ Sara McKinley‚ Wood Crafts’ controller‚ has prepared an annual budget divided into 12 periods for monthly reporting purposes. Wood Crafts uses
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A1. Budget planning is in essence the process of forecasting and determining a company’s financial goals for both the long term and short term. Competition Bike‚ Inc. has come up with a budget schedule for year 9 operations. Based on its previous years and past financial numbers there are several areas of concern. First research and development is a concern because in the years that they invested more money in research and development it seemed sales where at its highest. Research and development
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loss data‚ do you agree with Water’s decision to keep product 103? Yes‚ we agree with Water’s decision.We explain it through Incremental Analysis (differential Income Approach) Continue Drop Difference Sales 26670 0 -26670 Less-Variable Expense Compensation Insurance 458 0 458 Direct Labour 6879 0 6879 Materials 4851 0 4851 Supplies 350 0 350 Repairs 104 0 104 Power 302 0 302 Total Variable Expense 12944 12944 Contribution Margin 13726 -13726 Less-Fixed Expenses
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and pricing the products affordably‚ we can gain customers’ loyalty and awareness. Since our company’s main focus is premium products we will aim for high contribution margins‚ around 50%‚ on average‚ over all five products. After establishing our company brand and products within the market we will look to increase contribution margin to be between 55%-60% over all five products. Our company’s optimal balance is to have variable costs outweigh fixed costs unless our company gains rapid
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This set of 28 questions‚ taken from prior examinations‚ covers topics in Chapters 6‚ 7‚ and 9. The purpose of sample multiple choice questions is to acquaint you with the style and substance of typical exam questions on this material. Please be aware that: 1. multiple choice format questions are only one of many resources available to prepare for testing events – reading textbook chapters and working through chapter examples‚ studying the end-of-chapter review problem and accompanying
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case deals with cost analysis for pricing new business in a small injection moldingjob shop in "the Maritimes" in 1986‚ a good business year. In Septe mber of 1986 Michael Smith‚ Division Manager of Brunswick Pla stics‚ faced an important pricing decision on a majo r new b id opportunity . Michael knew that pric ing too high m eant losing a bid that wo ul d em ploy currently unused capacity. On th e other hand‚ pricing too low meant l osses on the j ob. In the first two months after Michael arri ved
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respect to revenue hours‚ power and operations hourly personnel are the two variable costs. The cost per revenue hour for power is $4.70‚ and the cost per revenue hour for operations hourly personnel is $24.00. Continuing with the analysis a contribution margin income statement has been created to determine the potential profits Salem Data Services could earn assuming the intracompany usage was 205 hours. Examining this income statement‚ operating income is a net loss of $30‚014 (see Exhibit 1). This
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