Identify the three ways to determine the break-even point. The break-even point can be(a) computed from a mathematical equation, (b) computed by using a contribution margintechnique, and (c) derived from a CVP graph.7. Define margin of safety and give the formulas for computing it. Margin of safety is thedifference between actual or expected sales and sales at the break-even point. Theformulas for margin of safety are Actual (expected) sales – Break-even sales = Margin of safety in dollars;
Words: 394 - Pages: 2
4.0 FINANCIALS 4.1 Break-even Analysis It is estimated that in its first year on the market, Shades of Mercedes will produce sales revenue of $42,000,000. This sales revenue estimation is based on sales within the United States combined with international sales. The average sales price is $120 with a corresponding variable expense of $80 per pair. Thus the contribution margin per pair of sunglasses is $40 ($120-$80). With estimated fixed expenses of $3,000,000; a net loss is accumulated
Words: 1383 - Pages: 6
6 Appendix C- Variable and Fixed Cost in respect to revenue hours 7 Appendix D- Breakdown of Variable Cost per Hour Usage 8 Appendix E- Contribution Margin Income Statement, March 2004 9 Appendix F- Contribution Margin Ratios 11 Appendix G- Break-even Analysis 12 Appendix H- “What if” Analysis 13 Executive Summary Since 2001, Salem Data Services has been operating at a net loss. After review the reports from first quarter 2004, it has become apparent that action will be necessary.
Words: 2617 - Pages: 11
Inc This case is comprised of various situations that deal with behavioral costs in order to maximize profits. The use of break-even analysis and opportunity cost is used along with recognizing and using the fixed and variable cost. The Hospital Supply, Inc. case is where they manufacture hydraulic hoists and have a normal volume of 3,000 units per month. Using a break-even analysis the determination of the sales volume and prices will reveal what the company will need to profitably sell its product
Words: 1383 - Pages: 6
1. Executive Summary Berkshire Threaded Fasteners Company is going through hard time after its founder and president John Magers died. Relatively inexperienced Joe Magers became president of the company in 2010. An inexperienced Joe Magers found it all too hard with very little training to run the company successfully. It resulted in the financial statement of 2010 also, the company went on to make a loss of 73000 in a good business year. So Joe Magers decided to appoint Brandon Cook, an experienced
Words: 2820 - Pages: 12
higher revenue than a costs or vice-versa. Taking in account this information, a business make changes in order to maximize the profit. It also helps to see where the break-even points are located, so they can assume that beyond the break-even point is when the business will be able to generate the best profits; while below the break-even point will result in loss of money. In
Words: 529 - Pages: 3
Revised Spring 2011 EXAM REVIEW UNIT II - CHAPTERS 4, 5, & 6 Study Suggestions Review your class notes, homework exercises and problems. Review Summary, Review Problem and Glossary at the end of each chapter. Use your Study Guide, especially Multiple Choice and True & False questions Review the resource materials and practice quizzes and exams available on the Textbook Website: http://highered.mcgraw-hill.com/sites/0073048836/information_center_view0/ Additional review materials are
Words: 5798 - Pages: 24
behavior. Four of the more common social psychological concepts that I noticed over fall break were the theories of having hindsight bias, confirmation bias, overconfidence, and egocentrism. All four play an important role in characterizing a person’s personality and a necessary portrayal for observing another person’s behavior. The first psychological concept that I found myself experiencing over fall break is the concept of hindsight bias. For reference, hindsight bias, or the “I knew it all along”
Words: 791 - Pages: 4
Chapter 1 Introduction to Quantitative Analysis Teaching Suggestions Teaching Suggestion 1.1: Importance of Qualitative Factors. Section 1.2 gives students an overview of quantitative analysis. In this section, a number of qualitative factors, including federal legislation and new technology, are discussed. Students can be asked to discuss other qualitative factors that could have an impact on quantitative analysis. Waiting lines and project planning can be used as examples.
Words: 2324 - Pages: 10
is something will spoil while they are on break, not caring because it was not their money or just because they are wasteful. College students may say this is not true. Whether it is fall, spring, summer, or winter, at some point all college students get a break and are able to come home for a week or two. Do they pack up all of their stuff or do they leave it there? What about all of their food? Eighner states, “Students throw food away around the breaks because they do not know whether it has spoiled
Words: 992 - Pages: 4
