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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1) Variable expenses in relation to Revenue Hours are Power‚ Wages of Hourly Personnel‚ Corporate services‚ and Sales Promotions. Variable Expenses | January | February | March | Power | $1546 | $1485 | $1697 | Hourly Personnel | $7896 | $7584 | $8664 | Corporate Services | $15‚424 | $15‚359 | $15‚236 | Sales Promotions | $7‚909 | $7‚039 | $8‚083 | TOTAL VC | $32‚775 | $31‚467 | $33‚680 | FixedExpenses | January | February | March | Space Costs | $9‚240 | $9‚240 | $9‚240
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break-even point? Should this project be accepted by the approval committee? SOLUTION As the numbers indicate‚ this would not be an economically feasible project for a number of reasons. It would take more than the projected four year life span to breakeven on the initial investment‚ the return on investment is a very low number (-1)‚ and the net present value is currently projected as a number less than zero. Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Sales 30‚000 33000
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enough. (All the calculations in the charts were based on revenue potential and acquisition costs.) Comparing between the 2 options‚ it seemed that choosing affluent customers only would be easier to achieve since number of the required customers of breakeven point with a ROI of 5 million is smaller than that of choosing both middle class and affluent customers. Moreover‚ as customer base grew‚ profits of selecting affluent customers only were bigger than those of selecting both middle class and affluent
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PRINCIPLES OF COST CONTROL 1.1 Introduction Cost is important to all industry. Costs can be divided into two general classes; absolute costs and relative costs. Absolute cost measures the loss in value of assets. Relative cost involves a comparison between the chosen course of action and the course of action that was rejected. This cost of the alternative action - the action not taken - is often called the "opportunity cost". The accountant is primarily concerned with the absolute cost. However
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variable costs of $500‚000 and outsourcing will have no fixed costs with variable costs of $300‚000. These figures can be input into the breakeven cost volume analysis module in POM for Windows and it can be determined that the best option for Shuzworld is to purchase new equipment. This is recommended as the best option due to the data received from the breakeven
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Intermediate piano/2B October 8‚2013 Ah-Leek Mitchell Multi-Song Review Max Schneider covers “Breakeven”‚”Treasure”‚And “ Waiting on the world to change” Treasure:http://www.youtube.com/watch?v=ulgiMCCDRoA&list=PLIu9b2uUt31OMfZ1S0SgwR94v2NBCGRJx Breakeven:http://www.youtube.com/watch?v=WKcVt1Cn5BI&list=PLIu9b2uUt31OMfZ1S0SgwR94v2NBCGRJx Waiting on the world to change: http://www.youtube.com/watch?v=a0WDppVEpRo&list=PLIu9b2uUt31OMfZ1S0SgwR94v2NBCGRJx I’m
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Although it will fulfill her lifelong dream‚ Patricia is not confident that demand for her Tiny Trisha doll will exceed the breakeven point computed in Problem 6-5. If she chooses a less appealing site and does more of the work by hand‚ her initial investment cost can be reduced to $5000‚ but her per-unit cost of manufacture will rise to $15 per doll. a. What is the breakeven point for this new process? b. Compare this process to the process proposed in the previous problem. For what volume of demand
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