BILL FRENCH CASE Question 1: What are the assumptions implicit in Bill French’s determination of his company’s break-even point? The following assumptions are implicit in Bill French’s determination: • He has assumed that there is just one breakeven point for the firm (by taking the average of the 3 products) • He has also assumed that the sales mix will remain constant • He has also assumed that the sales mix will remain constant. Total revenue and total expenses behave in a linear
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the ancillary services. He wanted all various support activities such as parking lots, game programs and food services to be handled as profit centers. Dr. Starr instructed the Stadium Manager, Hank Maddux during their recent meeting to develop a break-even chart and related data for each of the centers. Among the services,
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margin $12 - $.40 = $ 11.6 Contribution Margin 2. Determine the annual break-even point, in number of haircuts. Support your answer with an appropriate explanation. Show calculations to support your answer. The break-even point is going to be the point in which your gains are equal to your losses. Anything past this point is profit for your business. Formula: Total Fixed Costs / Contribution Margin = Break-even Point 5 (employees) * $9.90 * 40 * 50 = $99,000 + 1750 (monthly costs) * 12
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What is the break-even point in passengers and revenues per month? Break-even point = Fixed cost / Contribution margin Contribution margin = Revenue - Variable cost per unit = $160 - $70 = $90 Break-even point = $3,150,000/$90 = 35,000 Break-even point in passengers is 35,000. Revenue per month is = Break-even point * selling price = 35,000*160 = $5,600,000 B. What is the break-even point in number of passenger train cars per month? Break-even # passengers
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Pierre believes that his break-even output may be too high. With reference to the case study, what would be the best approaches for him to use in order to reduce his break-even output? Justify your view. (16 marks) The break-even output is the number of units at which a firm ‘breaks even’, where total revenue is just enough to cover total costs, meaning that no profit or loss is made. One way to reduce his break-even output is to increase the price as increasing the price will increase the profit
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variable cost. Break-even is a subset of CVP analysis (in the next section we will discuss break even) that determine the level of company’s operation where company’s’ earn no profit or loss with the calculate cost structure while CVP analysis determine the level of activity where a company earns a profit with some determine cost structure. CVP analysis is actually a marginal analysis that runs under specified assumptions in a short run. BREAK EVEN ANALYSIS Break even analysis is one of
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Managerial Accounting Essay gsm access sites Power saving initiatives June 2013 Table of Contents 1. EXECUTIVE SUMMARY 3 1.1. Introduction …………….. 3 1.2. Afghanistan fuel prices and trends 3 2. FUEL SAVING INITIATIVES 4 2.1. DCB Hybrid power solution 4 2.2. Hydromix and ProGSM monitoring solution 4 a- Hydromix chemical solution ...……………………………………………………………………………… 4 b- Consumption
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aircrafts, I found the NPV to be -$584 million. This was definitely an unacceptable NPV. The revised break-even analysis by Lockheed revealed that the project reached economic break-even with the production of 275 aircrafts at $12.5 million per unit. But as per my analysis, the break-even at this level of the production was not attained. Despite industry analysts predicting 300 units as Lockheed’s break-even sales point, the net present value remained insufficient to cover costs at negative $274 million
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CASE : BILL FRENCH 1. What are the assumptions implicit in Bill French’s determination of his company’s break-even point? Assumptions Sales volume will be maintained. No planned changes in volume next year Only one, aggregate break-even point is utilized in the analysis. Sales mix will remain constant. Linearity will be exhibited by both total revenues and expenses over the relevant range. No capital investments that will increase fixed costs. Constant dividends are paid out to the company’s stockholders
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UNIT 3 FINANCIAL FORECASTING FOR BUSINESS TASK 1 Start-up costs are linked and associated with setting-up a business such as legal fees, purchasing of equipment, rented property deposit. Start-up costs means a different sort of costs, which a new business owner should get in so that the business can exist. Operating costs are expenses that relate to a business activities and they are divided into fixed and variable costs. Different businesses have different costs associated with them. Variable
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