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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DISCUSSION Our group discuss about case 11-55. Below are the solution: Question 1 Prepare a new contribution report for February‚ in which: * The static budget column in the contribution report is replaced with a flexible budget column. * The variances in the contribution report are recomputed as the difference between the flexible budget and actual columns. Answer Particulars | Static Budget | Flexible Budget | Actual | Variance | Unit (pounds) | 200000 | 225000 | 225000
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3 Cost-Volume-Profit Analysis Learning Objectives 1. Explain the features of cost-volumeprofit (CVP) analysis 2. Determine the breakeven point and output level needed to achieve a target operating income 3. Understand how income taxes affect CVP analysis 4. Explain how managers use CVP analysis in decision making 5. Explain how sensitivity analysis helps managers cope with uncertainty 6. Use CVP analysis to plan variable and fixed costs 7. Apply CVP analysis to a company producing multiple
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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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INCREMENTAL ANALYSIS TRUE-FALSE STATEMENTS 1. An important step in management ’s decision-making process is to determine and evaluate possible courses of action. 2. In making decisions‚ management ordinarily considers both financial and nonfinancial information. 3. In incremental analysis‚ total variable costs will always change under alternative courses of action‚ and total fixed costs will always remain constant. 4. Accountants are mainly involved in developing nonfinancial information
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$85.35 | | Total variable cost | $352.60 | 7. For each distribution strategy‚ calculate the unit contribution and contribution margin ratio for each of the two product lines (necklaces and earrings). What is the weighted average contribution margin for an order at a trade show and an order with a sales rep? For trade show distribution strategy‚ the unit contribution and contribution ratio for each of the product lines can be determined as below: | Necklace | Pair of earrings | Manufacturing
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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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Textbook Ex. 20.1 Listed below are nine technical accounting terms introduced in this chapter: Variable costs Relevant range Contribution margin Break-even point Fixed costs Semivariable costs Economies of scale Sales mix Unit contribution margin Each of the following statements may (or may not) describe one of these technical terms. For each statement‚ indicate the accounting term described‚ or answer "None"
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Accounting II Final Exam Review Chapter 18 Direct and Indirect Costs -Cost – a payment of cash or a commitment to pay cash in the future for the purpose of generating revenues. A. Cost object – costs that are often classified by their relationship to a segment of operations. Ex. Product‚ sales territory‚ a department‚ or an activity‚ such as research and development 1. Direct Cost = identified with and can be traced to a cost object Ex. The wood for a guitar is a direct cost of the
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Foxy Originals 1. Discuss the pros and cons to launching the Foxy brand in the U.S. Pros: Kluger and Orol had established strong Foxy jewelry market in Canada but it is getting saturated. By expanding into the United States Foxy would be able to avoid oversaturation of the Canadian market. The U.S. jewelry market was almost 10 times larger than the Canadian market which offers great opportunity for their product exposure. With this expansion‚ Kluger and Orol could expand their production as
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