Chapter 5 Discussion Questions |5-1. |Discuss the various uses for break-even analysis. | | | | | |Such analysis allows the firm to determine at what level of operations it will break even (earn zero profit) | | |and to explore the relationship between
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Fixed operating cost per month $3,150,000 A) what is the break-even point in passengers and revenues per month? Passengers 35,000 and the Revenue is $5,600,000 B) What is the break-even point in number of passenger train cars per month? Passenger train cars are 556. C) If Springfield Express raises it average passenger fare to $190, it is estimated that the average load factor will decrease to 60%. What will be the monthly break-even point in number of passenger cars? Passenger train cars would
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in Bill French’s determination of his company’s break-even point * Bill was using volume base costing, when he is doing calculation for O/H he didn't pay any attention to product base calculation. So he cannot know the effects of the product to cost. With his calculation it is not so easy to decide to go ahead to producing which products. * For the right break-even point calculation it is necessary to make a calculation product base break-even point. And Bill was thinking all the cost are
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went up from 4,535 to 5,000. In terms of sales dollars it increased from 7,287,745 to 7,620,000. This happened because while variable costs actually went down, their average sales ticket went down by 83 which caused them to have to sell more to break even. The breakeven point from 2004 to 2006 went up from 5,000 to 7,509. Breakeven in terms of sales dollars increased from 7,620,000 to 11,661,477. Though the average sales ticket went up some, it was not enough to cover the increase in variable and
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Price is an element of the marketing mix that can produce revenue for an organization. Price communicates to the market the value positioning of an organization's product. A product that is well-designed and marketed as a premium product can bring in increased revenue for an organization. Pricing is more than a number on a tag and has many components. Pricing decisions, strategies are complex and involve the decision makers to consider many elements such as the company’s positioning, the company’s
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Victoria Magazines Ltd is considering launching a new monthly magazine at a selling price of £1 per copy. Sales of the magazine are expected to be 500,000 copies per month, but it is possible that the actual sales could differ quite significantly from this estimate. Two different methods of producing the magazine are being considered and neither would involve any additional capital expenditure. The estimated production costs for each of the two methods of manufacture, together with the
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Break-even Analysis PROCEED: Financial Analysis for Salesoft Number of prospects = 20 (given) Expected number of final buyers = (1/4) of 20 = .25*20=5 No of users per final buyer = (200 + 600) / 2 = 400 Sales Revenue per user (400 users per buyer) = $ 2,400 (given) Sales Revenue (expected) = 2,400 * 400 * 5 = $ 4.8 million Development cost for remaining modules = $ 1 million (given) Profit = $ 3.8 million Trojan horse: Financial Analysis for Salesoft Expenses R&D cost = $ 200
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Artists' Royalties | ($1.00) | Contribution per CD unit | $6.40 | B. Break-Even volume in CD units Fixed Cost: | | | | | | Advertising | $275,000 | | Break-Even in Units | | Overhead | $250,000 | | $525,000 | = 82031.25 | units | Total | $525,000 | | $6.40 | | | | | | | | | Contribution per CD Unit | $6.40 | | | | | Break-Even Volume in Dollars Break-Even (Units) * Selling Price | 82.031.25 * $ 9.00 = | $738,281.25 | C. Net
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compensation over the next five years. Table: Income Statement Break-Even Analysis Break-even analysis includes sales revenue, fixed and variable costs, and profitability. Breakeven analysis allows NXTech and investors to determine a company able to maintain some of their own operating expenses, as well as the point at which it became profitable. Table : Break-Even Analysis Current Break-Even Chart Figure: Current Break-Even
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