Question 1 a) On January 1‚ 2011 the Batista Company budget committee has reached agreement on the following data for the 6 months ending June 30‚ 2011: Sales units: 1st quarter – 5 000 2nd quarter – 6 000 3rd quarter – 7 000 Ending raw materials inventory – 50% of the next quarter ’s production requirements. Ending finished goods inventory – 30% of the next quarter ’s expected sales units. 3rd quarter actual production – 7 250 units Three pounds of raw materials
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Assignment Acknowledgement Sheet Module Title: Module Instructor : Semester: Programme: Module Leader: ECM05EKM – Financial Analysis for Managers Samatha Ravu Summer 2012 MBA-IT Samatha Ravu Intended Module Learning Outcomes Name of Student Due Date: Submitted on: Submitted to: Signature: Name and ID Fatima Hassan Al.Lawati PG11f1189 12 September 2012 through Moodle 12 September 2012 Through Moodle Signature 1 Table of Contents 1.0 2.0 Introduction ...................
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x=2/3 ∴ x=3 ‚2/3 Question 2 Total revenue = (Unit Price) x (Total quantity sold) Product X : =400q Product Y : =500q Total Cost = Variable costs + Fixed costs Product X : =50q+2000 Product Y : =80q+1000 Total Profit = Total Revenue – Total Costs Product X : =400q-(50q+2000) =400q-50q-2000 =350q-2000 Product Y : =500q-(80q+1000) =500q-80q-1000 =420q-1000 Break-even point in RM and units Total Revenue = Total Cost Product X : 400q=50q+2000
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AN ECONOMIC ANALYSIS OF BROILER PRODUCTION PROJECT IN G.G.S.S GIWA‚ KADUNA STATE. Poultry is an integral part of livestock production in that it offers the highest turnover rate and the quickest returns to investment outlay in the livestock enterprises. Funds invested in poultry production are recovered faster than in any other livestock enterprise. In Nigeria‚ Broiler production has been found to be a major source of revenue to
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least break-even by achieving a level of sales that covers its total costs. But what level of sales is necessary to break-even? To explore the concept of break-even‚ we need to define some basic terms: Fixed costs: Costs that do not vary with output or sales e.g. managers salaries‚ rent and rates on business premises. Variable costs: Costs that vary with the quantity produced or sold e.g. costs of materials and wages Total cost: Fixed costs plus variable costs for any possible level
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Operating Income = Total revenue – Total Expense Contribution margin is the difference between sales and variable expense. It is the amount of sales revenue left over after all the variable expenses are covered that can be used to contribute to fixed expense and operating income. Contribution Margin = Price – Variable cost per unit Contribution Margin Ratio = Break-even point in number of units and in total sales dollars: At breakeven‚ total cost (variable and fixed) equal total sales revenue
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Margin/Selling Price Break Even Points in Units = (Total Fixed Costs + Target Profit )/Contribution Margin Break Even Points in Sales = (Total Fixed Costs + Target Profit )/Contribution Margin Ratio Margin of Safety = Revenue - Break Even Points in Sales Degree of Operating Leverage = Contribution Margin/Net Income Net Income = Revenue – Total Variable Cost – Total Fixed Cost Unit Product Cost using Absorption Cost = (Total Variable Cost + Total Fixed Cost)/# of units a. Contribution margin
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[pic] Ex. 24–5 (FIN MAN); Ex. 9–5 (MAN) The flaw in the decision was the failure to focus on the differential revenues and costs‚ which indicate that operating income would be reduced by $30‚000 if Chil- dren’s Shoes is discontinued. This differential income from sales of Children’s Shoes can be determined as follows: Differential revenue from annual sales of Children’s Shoes: Revenue from sales ...................................................... $150‚000
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in Tables 1‚ 2‚ and 3. Hallstead Jewelers | Income Statement | For the years 2003‚ 2004‚ and 2006 (In thousands) | | 2003 | 2004 | 2006 | Total Sales | $8‚583 | $8‚102 | $10‚711 | Variable Costs | | | | Cost of Goods Sold | $4‚326 | $4‚132 | $5‚570 | Commissions | $429 | $405 | $536 | Total Variable Costs | $4‚755 | $4‚537 | $6‚106 | Contribution Margin | $3‚828 | $3‚565 | $4‚605 | | | | | Fixed Costs | | | |
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Refrigerator/freezer $500 Shack decoration (tables‚ counters‚ chairs‚ umbrella) $2400 Cleaning and equipment maintenance fee $150/mo Advertising (sign‚ banner‚ flyers) $ 125/mo The total fixed costs shown in table 1 are $5075‚ which is the
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