forecast. Assignment Outcomes P6 – prepare an annual cash flow forecast using monthly data M3 – analyse the implications of regular and irregular cash inflows and outflows for a business organisation D1 – evaluate the importance of cash flow and break even for the effective management of business finance |Task |Grading Criteria |Evidence
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|variable cost | | |fixed cost | Question 4 (1 point) [pic] Winny's Office Furniture has a contribution margin ratio of 16%. If fixed costs are $195,300, how many dollars of revenue must the company generate in order to reach the break-even point? Your Answer:Question 4 options: | | |Answer | Question 5 (1 point) [pic] Tim Taylor has written a self improvement book that has the following cost characteristics: |Selling Price
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net operating income Expense Expense Break-even point – level of sales to which profit is zero CVP Graph 1. Fixed cost Fixed cost Draw horizontal line on graph for fixed cost 2. Draw the expense line (keep in mind to add fixed cost) 3. Draw the revenue line (starts form 0 unlike the expense line) Profit Graph (simpler form) * Profit = Unit CM x Q – Fixed expenses * Unit CM x Q = Fixed expenses (the break-even point) Break-even Analysis * Equation method –using the
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presentation of some breakeven data, Davidson agreed. Duo Products had not been making use of this type of analysis in its planning procedures. Basically, what Bill French had done was to determine the level at which the company must operate in order to break even. According to him, the company must be able to at least sell a sufficient volume of goods so that it will cover all the variable costs of producing and selling the goods. In addition to that, according to French, it will not make a profit unless
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Care is currently seeing an average of 1230 visits per month creating $47,000 in net revenue. A breakeven analysis shows that the center should see 1460 visits per month at its current staff and cost (see appendix). In order for the center to break even, they would need to see an additional 230 patients per month or 8 patient per day. I have approached our marketing department to identify what financial impact would have if we launched a program to drive business directly to the Urgent Care.
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funds. The market downturn and struggling economy are mainly to blame for these budget cuts. As a student, my main concern is will I still be able to take the courses I need and want. Our textbook offered a look at break-even analysis, and the article I selected shows how break-even analysis can be used by universities to determine the profitability of all of its course offerings. While the "Show Me the Money" article is from 2004, it is very applicable to the current situation universities
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Part IV -- Budget & Finance for Organic Smoothie Organic Smoothie has initial $25,000 to start this project. Organic Smoothie is seeking an investment of $75,000 for startup of our store. This amount will be used for marketing, utilities, and any new expenses we may incur as a result of production. Organic Smoothie will have an estimated annual revenue growth rate of about 16% per year. Estimated cash receivable for the year is expected to reach $80,000; the remaining revenue will be collected
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10. Solve the problem A business owner makes 1,000 items a day. Each day he or she contributes eight hours to produce those items. If hired, elsewhere he or she could have earned $250 an hour. The item sells for $15 each. Production does not stop during weekends. If the explicit costs total $150,000 for 30 days. a. Calculate the firm’s accounting profit for the month; Revenue equals 1000 items per day * $15/item*30days = $450,000.Explicit costs are given as $150,000. Therefore, accounting profit
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The formula is: $12 - $0.40 = $11.60. The contribution margin ratio is 0.9666 or 96.66%. To obtain this number, you must divide the contribution margin per unit by the sale price per unit. The formula is: $11.60 / $12.00 = 0.9996. The Annual Break Even Point, in the number of haircuts will be 10,345 haircuts. To arrive at this total, we must first determine the fix cost of the operation. In this case the fix cost is the annual salary of the five barbers and the annual rent of the business (Wild
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When discussing elasticity you need to remember that the economy is constantly changing. This means that the cost of goods may go up or they may go down. When this happens you are faced with a decision to raise or lower prices to stay competitive or even stay in business. 5. Explain the role of costs in pricing decisions. Five important costs impact a firm’s pricing decisions: (a) total cost, or total expenses, the sum of fixed cost and variable cost incurred by a firm in producing and marketing
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