Case: CRU Computer Rental CRU Computer Rentals is a national computer rental company that has seen rapid growth since its inception in 1990. The company purchases computers‚ printers‚ monitors‚ and other peripherals and rents them out both for the long term and short term. CRU’s sales have begun to increase from the previous quarter‚ but profitability continued to decline. Although revenue was increasing‚ the decline in profit warranted further investigation into the root problem causing this occurrence
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do not change‚ then: (Points: 5) Contribution Margin Per Unit - Increases‚ Contribution Margin Ratio - Increases‚ Break-Even in Units - Decreases Contribution Margin Per Unit - No Change‚ Contribution Margin Ratio - No Change‚ Break-Even in Units - No Change Contribution Margin Per Unit - No Change‚ Contribution Margin Ratio-Increases‚ Break-Even in Units - No Change Contribution Margin Per Unit - Increases‚ Contribution Margin Ratio - No Change‚ Break-Even in Units
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Target Profit; Margin of Safety; CM Ratio 1. What is the monthly break-even point in units sold and in sales dollars? Break-even point in units sold = Fixed expenses Unit Contribution Margin $ 150‚000 $ 12 per unit = = 12‚ 500 units Break-even point in total sales dollars = Fixed expenses Contribution Margin Ratio $ 150‚000 30% = = $ 500‚000 2. Without resorting to computations‚ what is the total contribution margin at the break-even
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1) What is the break-even volume in units‚ and in sales dollars? Total Fixed Costs | 4‚290‚000.00 | Total Variable Costs per unit | 2‚070.00 | Contribution Margin per unit | 2‚280.00 | Contribution Margin Ratio | 0.52 | Break-even Point in Units | 1‚882 | Break-even Point in Sales Dollars | $8‚184‚868.42 | 2) Market research estimates that monthly
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and the contribution margin. Question 1 : Should Lille Tissages change the price from FF20 to FF15? In order to answer to this question‚ the marketing director and the finance director need to consider the variable costs and the contribution margin for the two solution for the price of item 345 : FF20 and FF15 and analyze the advantage and disadvantage of each one. The question is what effect will have the change of price? Changing the price will affect the contribution margin (sale price
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District Branch James McGaran was manager of the most important of the 31 branches in the Los Angeles area. Located in Los Angeles’s financial district‚ James’s branch had a staff of 15 people‚ revenues of $6 million‚ and $4.3 million in profit margin. The customer base was very diverse. Individual customers ranged from people who worked in the financial district with sophisticated retail banking needs to less informed individuals banking for convenience. Business customers were sophisticated
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CRU Computer Rental Case Solutions Solution 1 TABLE 1: CRU FLOWS | Customer | Receiving | Status 24 | Status 40 | Stored Orders | Orders at Suppliers | Status 41 | Status 42 | Status 20 | | | | | | | | | | | Throughput(Units/Week) | 1000 | 1000 | 1000*.70=700 | 1000*.30+ .15*700= 405 | 405 | 405 | 405 | 405 | 1000 | | | | | | | | | | | Inventory(Units) | 8000= 8*1000 | 500 | 1500 | 1000 | 500 | 405= 405*1 | 500+405 = 905 | 500 | 2000=2*1000 | | | | | |
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example‚ SDS’s fixed costs were $212‚939 which were 95% of the costs for the month‚ while SDS’s variable costs‚ comprised only of power usage and hourly wages‚ were only 5% of the monthly costs. Again‚ using March 2004 as an example‚ SDS’s contribution margin was 95%‚ which indicates that $0.95 out of every $1 of revenue went toward fixed costs. Since we are unable to change the SDS’s fixed costs in the short term and also reducing fixed costs would in turn decrease SDS’s billing capacity‚ the
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| NewCustomers | UpgradeCustomers | SPVCUCMU | $275 100 175 | $100 50 50 | The 60%/40% sales mix implies that‚ in each bundle‚ 3 units are sold to new customers and 2 units are sold to upgrade customers. Contribution margin of the bundle = 3 $175 + 2 $50 = $525 + $100 = $625 Breakeven point in bundles = = 24‚000 bundles Breakeven point in units is: Sales to new customers: | 24‚000 bundles 3 units per bundle | 72‚000 units | Sales to
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Homework # 8 Chapter 10 1. List and discuss 5 problems that can lead to differences between actual cost and standard cost for an operating period‚ pointing out how each increases potential savings. Any number of problems can develop in day-to-day operations that will lead to differences between standard and actual costs. These include overpurchasing‚ overproduction‚ pilferage‚ spoilage‚ improper portioning‚ and failure to follow standard recipes‚ among many others. There are two
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