...CHAPTER 7 Cost-Volume-Profit Analysis ANSWERS TO REVIEW QUESTIONS 7-1 a. In the contribution-margin approach, the break-even point in units is calculated using the following formula: [pic] b. In the equation approach, the following profit equation is used: |[pic] |fixed expenses |[pic] | This equation is solved for the sales volume in units. c. In the graphical approach, sales revenue and total expenses are graphed. The break-even point occurs at the intersection of the total revenue and total expense lines. 7-2 The term unit contribution margin refers to the contribution that each unit of sales makes toward covering fixed expenses and earning a profit. The unit contribution margin is defined as the sales price minus the unit variable expense. 7-3 In addition to the break-even point, a CVP graph shows the impact on total expenses, total revenue, and profit when sales volume changes. The graph shows the sales volume required to earn a particular target net profit. The firm's profit and loss areas are also indicated on a CVP graph. 7-4 The safety margin is the amount by which budgeted sales revenue exceeds break-even sales revenue. 7-5 An increase in the fixed expenses of any enterprise will increase its break-even point. In a travel agency, more clients must be served before the fixed expenses are covered...
Words: 7778 - Pages: 32
...Terrell Hinton aka Kelsey The Role of Education and Economic Growth Author Samuel Bowles is a firm believer that Education and Economic Growth go hand in hand, especially in a country like the U.S., where technology is steady changing and great minds are needed in order to keep up! They actually go hand in hand. “While the spread of education has undoubtedly been one cause of economic growth in most countries, the reciprocal relationship is also important. The development of general education in the United States and Europe may be due in large part to the rapid rate of economic and social change, which renders it increasingly difficult to provide adequate socialization and occupational training for youth in the traditional family, church, and apprentice-oriented systems of education. In an era characterized by rapid technological change, urbanization, and shifts in the sectorial and occupational distribution of the labor force, the skills of the fathers do not meet the needs of the sons; indeed, the skills sufficient for the sons in their young manhood may be obsolete before they reach middle age. For this reason education and training have become increasingly specialized, their functions carried out by full-time teachers in institutions designed solely for that purpose, that is, in schools. At the same time, the content of education has become increasingly general, with the stress on literacy and the broader aspects of economic and political socialization of youth rather...
Words: 399 - Pages: 2
...Case Study: Economic Crisis and Higher Education in the United States The 2008–2012 economic failure is considered by many economists and investors to be the worst financial crisis since the Great Depression of the 1930s. It results in the risk of total collapse from big financial firms, the bailout of banks by national governments, and downturns in stock markets around the world. The crisis also plays a significant role in the crash of key businesses and collapse of housing market, results in the delayed unemployment. Higher education is a large and various venture in the United States, which has impacted by the economic recession in a number of ways, but these impacts have not been the same and vary depending on state and type of institution. Most higher education traditions started to be concerned about their financial problems due to economic recession. Their main source of revenue has been hurt by the downturn, and that those universities would need to make hard decisions about how to spend their money. In some states, a lot of institutions are in process of fund-raising programs to avoid delaying their supported campus building projects. Many of higher education university’s leaders have been considering and solving of two following questions: How is the economic downturn affecting institutions both public and private? What strategies are leaders implementing to guide their institutions? Unsuccessful budget strategies are the main reason that caused many...
Words: 1078 - Pages: 5
...Executive Summary Economic indicators are statistics put out by government agencies and some private companies to provide measurements for evaluating the health of the economy, the latest business cycles and consumers spending behavior and patterns. Various economic indicators are released daily, weekly, monthly and/or quarterly which can result in an enormous amount of data to go through. Post-Secondary colleges and universities rather than wade through all data reports and economic indicators can select a few macroeconomic indicators to assist in meeting the challenges of the market to provide a quality and competitively priced education. Significant indicators used in this paper to aid in the decision making process for sustainability and growth for post-secondary education are inflation, the unemployment rate, interest rates and consumer confidence. This topic is of interest because for the past 35 years holding a four-year college degree has given workers a distinct advantage in the U.S. labor market. There is usually a large wage gap between college-educated working adults and those with high school degrees. With technological advances in the workplace and a growing reliance on computers, skilled workers are needed to apply for these technological positions. However, based on new trends the U.S. labor market now favors workers who hold a graduate degree (Valletta, 2015). It is because of these new trends we want to focus on the need for quality education and economic factors that...
Words: 1797 - Pages: 8
...[pic] [pic] Charter Schools and Traditional public schools both have a profound effect on our students in many different ways but charter schools have much more of an effective way to get our Children not only through school but also through college. A large sum of students that have attended Charter schools have gone on to college receiving a 3.0 or higher. The Impact that education in Charter schools that have a college prep program is much more effective in student success than Public school education. Charter schools are publicly funded institutions that operate under their own standards of conduct and curriculum. Although these institutions are funded by tax dollars, charter schools are ultimately given the freedom to establish their own methods of operation, similar to how private schools are able to operate their instructional and social practices. Various studies and statistics reveals that students who come from lower-income families or students that are English language learners revealed higher success and performance rates in charter schools than in public school. According to the DC fiscal policy institute, the median proficiency level at the 43 charter schools studied rose from 44.2 to 50.2 percent from 2008 to 2012, while it fell from 40.4 to 36.7 percent at the 109 public schools. Charter schools serving low-income children are outperforming comparable traditional schools at many charter...
Words: 1257 - Pages: 6
...Previously, I stated that families are changing and will continue to change. I must also recognize that economics and education are evolving too. They have a direct correlation with each other. If one was to travel back in time to the fifties, they would hear people give reference to the “American Dream”. The American Dream is a happy and successful way of life that is achieved through hard work with stability as the outcome. Considering the evolution of things that is going on today, the American Dream seems to be far out of reach. Growing up, it was drilled in my head that to be successful, to own the home that I want, to not live paycheck to paycheck, and to live comfortably, I must continue to increase my education. I had to go to a college...
Words: 609 - Pages: 3
...Education Is The Only Most Significant Aspect Of Economic Development For a country to grow economically there requires being engagement of human capital and skills. However, skill are created and enhanced through formal schooling. It is believed that economy interacts positively with education an aspect that leads to prosperity of a country’s economy. Since the advancement of technology, education becomes increasingly valuable as well as its utilization in various aspects on the job. By enabling employees to continue their education, they are more likely to improve their work rate and in doing so increase economic growth. In this view, the country needs to train and educate workers to enhance their performances in these industries. While it is believed that other factors such as economic policies, institutional quality, government, resources endowments, national resources, and cultures foster economic development, education is only significant factor that supports economic development. The modern economy is characterized by technology oriented goods and services. These qualities in the market require enhanced level of education to achieve the economic goals set by the country and the society. In order to use the products that serve the contemporary world, consumers are required to adopt the necessary information and knowledge about the commodities. Acquiring the important information on the product use is the act of education. Thus, through education, the quality...
Words: 1077 - Pages: 5
...The impact of early education as a strategy in countering socio-economic disadvantage Research paper for Ofsted’s ‘Access and achievement in education 2013 review’ Professor Chris Pascal and Professor Tony Bertram UK Research Team: Sean Delaney, Selma Manjee, Marjory Perkins and Manja Plehn International Research Team: Alice Bennett, Carol Nelson, Sarina Razzak and Maureen Saunders Centre for Research in Early Childhood (CREC) © Centre for Research in Early Childhood (CREC) 2013 The views expressed in this report are the authors’ and do not necessarily reflect those of Ofsted. Any enquiries regarding this publication should be sent to Elizabeth Boulton at publishing@ofsted.gov.uk or Aviation House, 125 Kingsway, London WC2 6SE This publication is available at www.ofsted.gov.uk/accessandachievement. No. 130155-RR-005 In June 2012, Sir Michael Wilshaw, HMCI, stated his determination to address the issue of narrowing the gap of educational achievement between disadvantaged pupils and others. To support this intention, The Centre for Research in Early Childhood has been commissioned by OfSTED to conduct a review looking at the impact of Early Childhood Education (ECE) initiatives to combat social and economic disadvantage, both in the UK and internationally. This paper: Examines the impact of nati...
Words: 16875 - Pages: 68
...Executive Summary The purpose of writing this report is to evaluate and provide sound advices to the company, Venture Simulation Ltd on its business simulation game, Sim Venture. Several recommendations will be given for future improvements based on the main business areas of the company. In recent years, the business simulation industry is growing rapidly. With outstanding product design and feature, more and more educational institutes and commercial organizations demand the business simulation to provide their students and staffs quality business and entrepreneurship learning. Since there is a potential market opportunity for the product, it is necessary to introduce a new product and implement an aggressive marketing strategy in the existing and new market in order to obtain sustainable competitive advantage for larger market shares. For scaling the venture, the owners emphasize the long lasting customer relationships to enhance the customer loyalty to the product. Effective intellectual property protection strategy must also be executed in order to prevent others from copying the simulation. Finally, several innovative strategies including effective marketing strategy, introduction of new product, penetrations of new markets are strongly recommended for better future business growth. Table of Contents Executive Summary Table of Contents 1. Introduction 1 2. Background of the Company 1 3. Market Opportunity 2 4. Product...
Words: 1924 - Pages: 8
...We can deduce that quality of living are better in the USA, UK, New Zealand and the Czech Republic as these are the 4 countries with the highest National income per capita and the ones that seem like reasonable places to live. The USA is, according to the GNI per capita statistics, the country with the best living conditions with $43740, however, this is not necessarily accurate as the US has no free health care system and high crime rates among other faults which makes the worlds largest economy weak compared to the UK and New Zealand where the GNI may not be as high as America’s but people have longer life expectancy, less crime and free health care... China, which is by far the most populated country in the list, and in the world, has the GNI per capita $1740, which is pretty pathetic. China is an up and coming country economically, however there are serious issues that need to be addressed before you can call the giant a reasonable place to live and be treated like an equal. It is very difficult to compare Tanzania, Kenya, and Pakistan to the other nations simply for the lack of products and capital in these countries. Even though there might be raw goods in the countries with great possibility, these countries are run by corrupt governments where the lack of capital makes it difficult for growth to be a reality. This makes it obvious that the standard of living in these countries is terribly bad. The four top countries in the list have a percentage that is next to nothing...
Words: 873 - Pages: 4
...The online business simulaTion game ThaT makes learning fun! Player manual Contents game basics Starting a game Finding your way around 2 3 Core activities Ordering product Making sales Increasing your sales Hiring staff game score Key Indicators Game characters 4 6 Checking progress Current week Stock levels Purchase reporting systems Check effect of promotions Financial reports Customer comments options a-Z system requirements faQ: game sites 7 8 8 9 The online business simulaTion game ThaT makes learning fun! Game basics The Small Business Game is an educational game where you run your own sport franchise store (The Sports Store). Each full game starts at week 1 and moves through to week 52 when the game ends. You can leave and come back at any time – we will save the game from your last week of inputs. A game week is pretty much like any week in a retail sports store business. Each week customers come in, browse and (maybe) buy a product from you. Each week you need to make sure that you have enough stock for people to buy, manage your cash and keep you eye on what is happening. starting a game During the registration process you assigned a team. This selection will set up the branding to be used in the game. Once you have been registered for the game, to get started, follow these steps. Click, ‘play now’ from any screen in the web site. To start a new game, click on the ‘new game’ button. To restart...
Words: 2190 - Pages: 9
...REAL-TY-COON Alternative method of teaching is a very important tool to encourage students to learn in a fun and meaningful way. Simulation game is one of the ways to achieve that. A simulation game is a dramatic view of real life situations for the serious purpose of learning about real experiences in a controlled environment. Students of CEC from IIM Raipur created and conceptualized a simulation game, REAL-TY-COON. The main objective of the game is to replicate real life scenario of construction business. The game is based on the concept of demand and supply and how market prices of products are determined. The game consisted of 5 set of teams. 4 set of teams played the role of suppliers and 1 played the role of builders. The division of teams was done as follows: Team Type | Teams | No. of Players | Builders | 5 | 4 | Cement Suppliers | 3 | 2 | Sand Suppliers | 3 | 2 | Stone Suppliers | 3 | 2 | Steel Suppliers | 3 | 2 | The game has 5 rounds. In each round, builders have to build a specific building allocated to them. To build any of the buildings, they have to buy adequate amount of cement, stone, steel and sand from the suppliers. They will be provided with fixed initial amount of cash. Builders can approach bank to get additional cash at a fixed rate of 10% which will be applicable for that round only, carrying forward loan for each extra round will attract an additional 5% rate per round. In case the builders are not able to get a deal from the...
Words: 654 - Pages: 3
...War has always been known to be ugly, but the further back in history we go, it seems to become more primitive. Observing the photo of the soldiers in their living quarters brings a realization to how relatively spoiled soldiers at war today really are. Although none of the soldiers in this specific photo look particularly displeased, they don’t have any comparison to give as this is the only standard of war they know. You can tell each soldier was a very hard working individual. In the photo, you can see soldiers participating in various laborious activities from sweeping to chopping wood. Everything was more involved than it is today with a much lower quality of living during the Civil War. To me, this single photograph goes a long way in telling the story of the life of a soldier during the Civil War. Others could take a look at the photograph and gain a better understanding for the hardships of the Civil War and further appreciate those in the military today. We can also gain a better appreciation for the improved living standards for any United States campaign today. Of course, technology has come a long way for us to look at this photo and find it hard to believe that this is how war was conducted, but to see it in a photograph really makes it real. I strongly believe photographs are worth a thousand words, and can, at times, teach more than a text book is able to. Going further into the difference in the standards of living during the Civil War and present day can clearly...
Words: 514 - Pages: 3
...Computers in Economics Education 1 The Role Computers Play in Economics Education Oluremilekun Ojo EDIT 6900 – Research Synthesis Computers in Economics Education 2 The Role Computers Play in Economics Education Introduction Schug identified that “economic education helps students develop the critical knowledge and skills they need as citizens to make intelligent decisions and to help shape economic policy” (as cited in Wentland, 2004, p. 640). According to Vowels, “teaching students economics, sometimes called the science of making decisions, is a key ingredient for helping them to become effective citizens, workers, voters, consumers, investors and participants in a healthy economy” (as cited in Wentland, 2004, p. 641). This research topic came about as a result of a current project with an economics teacher who would like to add some form of multimedia component into his syllabus. While trying to develop a suitable application for my client, I had to review the ways that technology is used to teach economics as my guide. In this process, I decided to conduct research into the role of computer technology in economics education. I was initially interested in how technology was introduced in to teaching economics and then retracing its journey into more contemporary uses of technology so that I can securely make predictions for the future. This approach was not very fruitful because I was unable to find articles that gave adequate information regarding the...
Words: 2655 - Pages: 11
...Education and Income Inequality: A Meta-Regression Analysis Abdul Jabbar Abdullah* Hristos Doucouliagos Elizabeth Manning - FIRST DRAFT - Please do not quote without permission from the authors September 2011 Abstract This paper revisits the literature that investigates the effects of education on inequality. Specifically, the paper provides a comprehensive quantitative review of the extant econometrics literature through a meta-regression analysis of 64 empirical studies that collectively report 868 estimates of the effects of education on inequality. We find that education affects the two tails of the distribution of incomes; it reduces the income share of top earners and increases the share of the bottom earners, but has no effect on the share of the middle class. Inequality in education widens income inequality. Education has a larger negative effect on inequality in Africa. The heterogeneity in reported estimates can be largely explained by differences in the specification of the econometric model. JEL Codes: I24, C01 Keywords: Education, inequality, meta-regression analysis Number of words: 12,683 * Corresponding author. Abdullah: Universiti Teknologi Mara Sarawak Campus, Malaysia and PhD Candidate Deakin University, ajabd@deakin.edu.au Doucouliagos: School of Accounting, Economic and Finance, Deakin University, douc@deakin.edu.au Manning: School of Accounting, Economic and Finance, Deakin University, elizabem@deakin.edu.au 1 Education and Income...
Words: 13666 - Pages: 55
