Competition Bikes Inc. Storyline Managing Capital & Financial Assets 04/12/2014 WGU JET2 Financial Analysis Task 4 - PASSED To: Vice President The following is a summary report to recommend whether Competition Bikes should change its traditional costing method to activity based costing‚ and an analysis of the breakeven point with regards to sales units and dollars for both CarbonLite and Titanium bikes. It also discusses the impacts to the breakeven point. The cost-volume-profit evaluation
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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 = $48.00 UVC = Total variable costs / Units produced = $512‚800.00/18
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its growth strategy‚ (2) diversify its income sources and decrease its dependency on its biggest client (Noranda)‚ (3) strengthen its reputation which is important to win long-term complex projects in the future and (4) gain an additional minimum gross profit of over $6mln (see exhibit 3‚ scenario 2).
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is particularly useful in the early stages of planning when it provides a framework for discussing planning issues. Q15-4. In a contribution income statement‚ costs are classified according to behavior as variable or fixed‚ and the contribution margin (the difference between total revenues and total variable costs) that goes toward covering fixed costs and providing a profit is emphasized. In a functional income statement‚ costs are classified according to function (rather than behavior)‚ such
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20.9 B. Ex. 20.10 Contribution margins and selling prices Evaluating marketing strategies Selecting an activity base CVP with multiple products Exercises 20.1 Topic Accounting terminology 20.2 20.3 20.4 20.5 20.6 20.7 20.8 20.9 High-low method of cost estimation Determining required sales volumes Computing break-even points Solving for missing information Ethical implications of CVP Using CVP Using CVP Understanding break-even relationships 20.10 20.11 Margin of safety Applying CVP 20.12 20
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CHapter 16 THE BEHAVIOR OF COSTS Changes from the Twelfth Edition All changes to Chapter 16 were minor. Approach We have retained our approach of putting all C-V-P topics in a single chapter because many schools’ marketing and management accounting core courses start simultaneously‚ and marketing likes to have break-even analysis covered early in the management accounting course. Also‚ if there are students in the course with work experience or‚ in the case of MBA courses‚ with some
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2. The contribution margin per chair for the Colonial model is: A) $51. B) $16. C) $35. D) $25. The answer is b. CM = P-V = $60 - $35 - $9 = $16. Page 1 3. If the sales mix and sales units are as expected‚ the break-even in sales dollars is closest to: A) $132‚000. B) $148‚500. C) $143‚000. D) $139‚764. Price: Variable Costs: Contribution Margin: Contribution Margin Ratio: The answer is c. Colonial to Early American Sales Mix: 3:1 Weighted Average Contribution Margin Ratio: .75(.2667) +.25(
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BA 117 Problem Set #1 - CVP Deadline: November 26‚ 2011 A. The break-even point in units can be computed as Fixed Costs divided by the contribution margin per unit. On the other hand‚ the break-even point in pesos can be computed as Fixed Costs divided by the contribution margin ratio. Using the profit equation π = TR – TC; where π = operating profit‚ TR = Total Revenue and TC = Total Cost‚ derive the break-even formulas. B. From the profit equation π = TR – TC‚ derive the formula for the
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Competition Bikes Finical Analysis Dan Petersen WGU – JET2 Finical Analysis Task 4 A. 1. To: Vice President This report has been prepared to argue the case that the company’s current costing method should be changed to the activity based costing method. This report will review; the difference between traditional based costing and activity based costing; traditional split and allocations with activity based costing; and discusses the breakeven point for Competition bikes Inc. with
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Direct Material | 290000 | 326250 | 432500 | -106250 U | Direct Labor | 168000 | 189000 | 174000 | 15000 F | Variable Overhead | 324000 | 364500 | 375000 | -10500 U | Total Variable Costs | 782000 | 879750 | 981500 | -101750 U | Contribution Margin | 818000 | 920250 | 796000 | 124250 U | CALCULATION Revenue = 225000 X 8.00 per pound = 1800000 Direct material (quantity) =290000 / 200000 = 1.45 Direct material = 1.45 X 225000
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