capacity for the planning period. _F___6. This cost is the combined amount of all the other costs. II. Contribution margin and breakeven Apollo Company manufactures a single product that sells for $168 per unit and whose total variable costs are $126 per unit. The company’s annual fixed costs are $630‚000. Use this information to compute the company’s (a). Contribution margin‚ (b). Contribution margin ratio‚(c). Break-even point in units‚(d). Break-even point in dollars of sales. (a). CM/unit = P/unit
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going to use a contribution income statement to emphasize the behavior of costs. We will then base our analysis on the contribution income statement for the past 3 years. Sales‚ variable expenses and contribution margin are expressed on a per unit basis as well as the contribution income statement. This income statement has been prepared for management’s use inside the company and would not ordinarily be made available to those outside the company. Slide 5 Contribution margin is the marginal
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Current Profit: $ 2500 New Price per additional unit: 0 New Contribution Margin = New Price per unit – Variable cost per unit =$8.5-$2.5 =$6 New Sales unit @40% additional sales= 5000*40%= 2000 Additional profit @40% additional Sales = Additional Sales* New Contribution Margin =2000*6 =$12000 New Sales unit @20% additional sales= 5000*20%= 1000 Additional profit @20% additional Sales = Additional Sales* New Contribution Margin =1000*6 =$6000 Steady: Sales: 5000 Price per unit: $10
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1. Haar Inc. is a merchandising company. Last month the company’s cost of goods sold was $61‚000. The company’s beginning merchandise inventory was $11‚000 and its ending merchandise inventory was $21‚000. What was the total amount of the company’s merchandise purchases for the month? A. $61‚000 B. $51‚000 C. $71‚000 D. $93‚000 Purchases = Cost of goods sold + Ending merchandise inventory - Beginning merchandise inventory = $61‚000 + $21‚000 - $11‚000 = $71‚000 2. Gabruk Inc. is a merchandising
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Submit Homew ork for Ch tad9000 gfmcppeopigbdej Advanced Manag Question 1: Score 0/4 Your response Exercise 5-1 Fixed and Variable Cost Behavior [LO1] Espresso Express operates a number of espresso coffee stands in busy suburban malls. The fixed weekly expense of a coffee stand is $1‚200 and the variable cost per cup of coffee served is $0.22. Requirement 1: Fill in the following table with your estimates of total costs and cost per cup of coffee at the indicated levels of activity
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ASSIGNMENT (ZCZA6103) SAIFUL HAFIZ BIN A. RAHMAN ZP01667 14-62 1. Determine which of Sportway’s option makes the best use of its scarce resource. How many Skateboards & Tackle Boxes should be manufactured? How many Tackle Boxes should be purchased? a) The best use of its scarce resource. Analysis of Product | |Tackle Box |Skateboard | |Direct Labor
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CVP Analysis of 2012 A critical aspect that managers must be aware of in order to make sound decisions and precise projections is the understanding of the relationships among costs‚ volume and the company’s profit; otherwise known as CVP analysis. CVP analysis stands for Cost-volume-profit analysis which a form of cost accounting in managerial economics. The five essential concepts underlying CVP analysis include: 1. The behavior of both costs and revenues as being linear throughout the relevant
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Perceptual Map Situation Analysis The Situation Analysis will help your company understand current market conditions and how the industry will evolve over the next eight years. The analysis can be done as a group or you can assign parts to individuals and then report back to the rest of the company. An online version of the Situation Analysis is available in the Getting Started area. (customers want better performing products) and for size is -0.7 (customers want smaller products). At the end of
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CVP and Break-Even Analysis Paper Learning Team A ACC/561 Instructor 2013 CVP and Break-Even Analysis Paper When starting a business or buying a franchise it is critical for one to determine the star-up cost associated with the business. However‚ the most import item one must look at is the breakeven point. The breakeven point is important because it helps one plan out its activities to gives business owners an idea of the sales needed to cover its cost before one can make a profit
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capacity and determine if taking Hi-Valu’s proposed contract would be the optimal solution. Quantitative Analysis: * By accepting the offer‚ BBC will increase their contribution margin by $442‚290 (Exhibit 1). Although there is a loss of contribution margin equal to 3000 units of BBC’s products‚ the additional contribution margin from Hi-Valu’s proposition more than offsets the loss. * Upon accepting the offer‚ BBC will need $735‚530 per year to invest in additional assets (Exhibit 2). BBC
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