Case 4-33: Cost Structure; Target Profit and Break Even Analysis Question 1: Compute Pittman Company’s break-even point in sales dollars for next year assuming: a. The agents’ commission remains unchanged at 15% $12,000,000 in sales is needed to break even while employing an outside sales force with commissions of 15% of sales. b. The agents’ commission rate is increased to 20% $13,714,286 in sales is needed to break even while employing an outside sales force with commissions of
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FINAL PROJECT 12/17/2015 Case 5-33 Problem 1) a) Break-even point in dollar sales @ 15% commission fixed expenses/CM ratio = $4,800,000/.40 = $12,000,000 b) If the commission increases to 20%: $4,800,000/.35 = $13,714,286 c) If the company uses its own sales force: $7,125,000/.475 = $15,000,000 Problem 2) $ Sales to attain target = tgt income before taxes + fixed expenses CM ratio $1,600
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Budgets & Break-even analysis. P6 Illustrate the use of budgets as a means of exercising financial control of a selected company Fixed Costs- The running costs of a business such as rent and wages. Variable Costs- Costs that varies with the level of output or sales.An example of a variable cost would be direct labor costs. The breakeven point to two decimal places is 6.12 (£68) | Fixed Cost | Variable Costs | Total | Revenue | Profit/Loss | 0 | 416 | 0 | 416 | 0 | -416 | 1 | 416 | 12
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Medical community technological initiatives Proposal Outline 1. Subject of Course Project: To analyze current medical technology infrastructures and insurance accurate processing demands while recommending improvements for doctor and patient level reports, bills, claims, records and data exchange and enhancements through the use of technology and business re-engineering initiatives. 2. Business Problem Statement: As compared
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Introduction to Management Science, 10e (Taylor) Chapter 1 Management Science 1) Management science involves the philosophy of approaching a problem in a subjective manner. Answer: FALSE Diff: 1 Page Ref: 2 Main Heading: The Management Science Approach to Problem Solving Key words: scientific approach 2) Management science techniques can be applied only to business and military organizations. Answer: FALSE Diff: 1 Page Ref: 2 Main Heading: The Management Science Approach to Problem
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reliability of break-even analysis in estimating budgeted activity levels for a selected organisation. Break – Even Analysis Break even analysis is reliable as it is made from the budget and it gives a financial structure to the business. The data used for break-even, the business try to make the data as accurate as possible. They make this data depending on the previous year’s financial report. That’s why break-even is reliable to estimate current year’s results. In a short run, break-even analysis can
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Introduction to Management Science, 10e (Taylor) Chapter 1 Management Science 1) Management science involves the philosophy of approaching a problem in a subjective manner. Answer: FALSE Diff: 1 Page Ref: 2 Main Heading: The Management Science Approach to Problem Solving Key words: scientific approach 2) Management science techniques can be applied only to business and military organizations. Answer: FALSE Diff: 1 Page Ref: 2 Main Heading: The Management Science Approach to Problem
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cents per message. Chapter 6: Cost Behavior: Analysis and Use LOOK AT CHAPTER 6 SLIDES Budget project: How many units do you need to break even. Also a cost volume profit graph. ON EXAM Mixed Costs Total Cost= Total fixed cost + Variable per unit * units ON EXAM: High-Low Method Ex: High hours of maintenance – Low hours / High Total Maintenance cost – Low Total Maintenance cost Predict Costs: 1) Account Analysis 2) High-Low Method Contribution Margin:
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GRADED DISCUSSION – ACCT2017 Question: Break-even analysis, the construction of break-even charts, and the related cost-volume- profit analysis is an area of accounting that provides management with relevant data. Discuss management’s use of this data for purposes of profit planning, policy formulation, and decision-making. It is essential to a business’s going concern that management executes proper profit planning, policy formulation and decision making. This is achieved with the help of tools
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educate those around him. Then, he was requested permission to make a presentation of some break-even data. The Duo-Products Corporation had not been making use of this type of analysis in its planning or review procedures. What French had done was to determine the level at which the company must operate in order to break even. He uses information given in past accounting records to construct his break even analysis without take into consideration with other department about the company operation.
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