CASE STUDY Tashtego Advanced Topics in Management Accounting and Control The purpose of this paper is to analyze the economic situation of the company Macedonian Shipping and give a recommendation whether the company should use the motor vessel Tashtego as a freight tender beween Dar-es-Salaam and Zanzibar in East Africa or as a tapioca ship between Balik Papan and Singapore in the East Indies. Fundamental to all these considerations are measurement issues. Financial measures‚ in particular‚ cost
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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 and 2004
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stable and predictable. They have a long life cycle. The competition in the market is fierce due to this stability in demand that results in low profit margins. On the other hand‚ innovative products are the ones that have clearly unpredictable demands. They may have very short life cycle because of the imitators. But luckily their profit margin is higher compared to the functional products. The supply chain management for the innovative products should clearly be different from the functional products
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entered the rapid growth stage. Chapter 2 2. [Financial Ratios and Performance] Following is financial information for three ventures: Venture XX Venture ZZ Venture YY After-tax Profit Margins 5% 15% 25% Asset Turnover 2.0 times 1.0 times 3.0 times A. Calculate the return on assets for each firm.
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Case: McDonald’s The Hamburger Price Wars 1. How serious is McDonald’s U.S. situation? Why is the company having problems? McDonald’s U.S. situation is rather bad as the sales declined in the first three quarters of 2002 with strong competitive pressure and low consumer satisfaction. Looking at its financial performance in 2002 (Table A)‚ it can be observed that McDonald’s SG&A had increase disproportionately in Q3 which resulted in lower operating income. Even though McDonald prides its success
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Bridgestone Behavioral Health Center: Cost-Volume-Profit (CVP) Analysis INTRODUCTION In June of the current year Dr. Thomas Russell‚ Executive Director‚ and Susan Smyth‚ Accountant‚ at the Bridgestone Behavioral Health Center were discussing the necessity of gaining a better understanding of how to monitor the Center’s operating and financial performance. Located in Cleveland‚ Ohio‚ Bridgestone provides prevention‚ intervention‚ and treatment services for individuals with substance abuse problems
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not only the budgeted profit‚ but also: * the output and sales level at which there would neither profit nor loss (break-even point) * the amount by which actual sales can fall below the budgeted sales level‚ without a loss being incurred (the margin of safety) In marginal costing‚ marginal cost varies directly with the volume of production or output. On the other hand‚ fixed cost remains unaltered regardless of the volume of output within the scale of production already fixed by management. In
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contribution margin. If you were able to provide us with the unknown information need pertaining to traceable fixed costs‚ we could better advise you on which product is most profitable and any products you may need to consider dropping. Explanation of Procedures Our team evaluated the information that you provided to us using a cost volume profit analysis. The main tool in evaluating the provided information was the breakeven analysis. We started by determining the contribution margin for each
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dollars) = Fixed cost/contribution margin ratio $7‚287.03 $7‚620.20 $11‚655.34 Break-even point in units (sale ticket) = Break-even point in dollar/Sales per tickets 4535 5000 7506 Margin of Safety = (Budgeted sales - Break-even point sales)/Budgeted sales 15.10% 5.95% -8.82% (Table 1. All the related data can be found in exhibit a.) Both the break-even point in dollars and the break-even point in units increase a lot‚ and the margin of safety drops down to negative
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and have no setup time when switching between products. Market demand for each product is 80 units per week. In the questions that follow‚ the traditional method refers to maximizing the contribution margin per unit for each product‚ and the bottleneck method refers to maximizing the contribution margin per minute at the bottleneck for each product. Table 7.5 A company makes four products that have the following characteristics: Product A sells for $50 but needs $10 of materials and $15 of labor
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