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 of $1.6M. In addition to quantitative analysis‚ we also considered qualitative factors in determining
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you should be able to: * Describe the differences between the accountant’s and the economist’s model of cost volume profit analysis. * Apply the cost volume profit approaches in the calculation of breakeven point‚ margin of safety‚ target selling price and sales volume. * Construct breakeven‚ contribution and profit volume graph. * Apply cost volume profit analysis in a multi product setting * Identify and explain the assumptions and limitations of cost volume profit analysis. INTRODUCTION
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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) = f / [(p-v)/p)] (Fixed expense/CM ratio) determine the sales volume needed to achieve a
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or piano lesson. I think I’ll be happy with my family. Finally‚ I tell my hobby. I do not smoke but drink alcohol sometimes although I do not get drunk. I play golf with my friends and companies. When my favorite season winter is coming I enjoy snowboard. Although I’m so old after the years‚ I really enjoy my life with activity sports. All of these are my future dream that I think. Good father and company are going to be spending my 37 years old by colleague who is good to wife and child in home
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Waltham Motors Division Q1. Using budget data‚ how many motors would have to be sold for Waltham Motors Division to break even? Answer Q1: Breakeven Fixed costs $260‚000.00 = ---------------------------------- = ---------------------- = 13‚326 units number of units Unit contribution margin $19.51 UCM (Unit Contribution margin) = USP (Unit Selling Price) † UVC (Unit Variable Costs) = = $48.00 - $28.49 = $19.51 USP = Sales / Units sold = $864‚000.00/18‚000 =
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No adjustments were made to the budget for the month of May after the contract was lost in April. Financial Analysis: Budget versus Actual One important thing to consider when looking at the budget versus the actual sales numbers is the breakeven point. This is the point at which expenditures and revenues equal zero‚ so while there is no profit‚ there is no loss‚ either. This calculation is considered an important statistic for businesses to know and
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Answer Key for Test Your Skills 1. Tutti’s Sandwich Shop has the following information regarding costs at various levels of monthly sales. Help Tutti separate her costs into fixed costs and variable costs so that she can predict and evaluate costs at varying levels of guests served. January February March Monthly Sales in Guests Served 10‚000 16‚000 20‚000 Cost of Sales (Food Cost ) 10‚500 16‚800 21‚000 Salaries‚ Wages‚ and Benefits 15‚000 15‚600 16‚000 Telephone 12‚750 16‚350 18‚750 Rent on
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Porsche: The Cayenne Launch Synopsis of the Situation Porsche has a legendary existence of more than 55 years with a brand image of being high-end‚ masculine‚ status-oriented sports car. Finding great growth and revenue opportunities in the light truck industry‚ Porsche announced to extend the product line by launching an SUV named ‘Cayenne’. This offended the Porsche enthusiasts and their negative responses overwhelmed the internet‚ press and media. Further‚ SUVs being associated with soccer moms
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Zachary Harris (#112177795) 11.09.2010 Donner Company FIT Analysis I. Opportunity * Customers: Electronics manufacturers; IBM‚ AT&T‚ Digital Equipment are customers for large orders of simple boards or small orders of prototype boards: Specializes in making circuit boards for experimental devices and pilot production runs * Costs: * Variable costs: raw materials‚ direct labor‚ selling expense * Fixed Costs: manufacturing overhead‚ indirect labor‚ administrative
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always something to do in UCSB there are over 400 clubs and organizations on campus. UCSB is known for their successful women’s basketball and men’s soccer teams. Non-varsity students can join a club team such as cycling‚ surfing‚ rugby or ski and snowboard. I want to attend this university to major in psychology to become a criminal profiler or other jobs that require a psychology degree. Five most popular majors for 2012 graduates where social science 20%‚ biology and Biomedical Sciences
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