CEO: * COO: Quick Highlight of current key results that make us look the best Contribution margin of YJW | Average contribution margin in the market | 50.6% | 43.72% | Our contribution margin, high potential sale figures in the traditional market, and rising stock price prove that we are one of the most successful companies in the industry. We have made great strides in increasing our contribution margin to 50.6%, ranking second in the market. This was a result of investments geared
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4-12. By using unit contribution margins, we only consider revenues and variable costs that are differential to our decision. While relying on unit gross margins would probably lead to incorrect decision because we take into account revenues and all costs, including both variable costs and fixed costs. However, some costs are not differential to our decision. 4-15. Nonfinancial factors in decisions to drop a product line include the effect on employees who work on that product line, the effect on
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− (Variable cost per unit x N) = Fixed cost + Profit (Contribution margin per unit x N) = Fixed cost + Profit N = (Fixed cost + Profit) ÷ Contribution margin per unit N = ($750,000 + $200,000) ÷ ($57 − $32) = 30,000 units Break-even dollars = $57 x 30,000 units = $1,710,000 b. N = ($750,000 + 21,000) ÷ ($57 − $32) = 38,000 units Sales in $ = $57 x 38,000 = $2,166,000 Exercise 3-2B N = Number of units to break-even N = Fixed cost ÷ Contribution margin per unit N = $84,000 ÷ ($78 – $43) N = 2,400 units
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Bremen Electronics Company Background Bremen Electronics is a German company that, in 1993, started a subsidiary in the United States called Bremen Electronics USA. Members of the subsidiary’s management team include Herman Klein, President and Marlene Baer, Controller. The initial purpose of this subsidiary is to market two products that were previously marketed in Europe successfully. Bremen Electronics USA began developing a strategy to expand their operations to US markets to meet a
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$192,400 Variable Cost: $(9,844.10) Contribution Margin: $182,555.90 Fixed Cost: $(212,939) Net Income: $(30,383.10) 4. To break even would require a level of 177.39 commercial revenue hours. 5. Option 1: Income decreases by $12,611.82 Option 2: Income decreases by $3948.18 Option 3: An additional $1548.72 could be spent on promotion and leave SDS without reported loss, assuming revenue hours increase 30%. 6. Based on my analysis, Salem Data Services is a problem to Salem
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96122050 96122051 96122052 96122073 96122085 96122088 96122092 Group 1 Through our study of Salem Telephone Company (STC), we’re going to answer that if Salem Data Services (SDS) is really a profitable business to keep by using break-even point analysis. Before we come out the final solution, let’s discuss SDS’ accounting report step by step. First, we have to divide the various costs incurred in SDS into two types: variable costs and fixed costs. From Exhibit 2 we can see that only “Power” and
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also included financial matter of the company as well. In the report, it has been given the company’s Budgeted Income Statement for the year ended by 31st of December. In this report, commission rate, Break Even Point in Dollar (BEP in $) and Contribution Margin (CM) has been given as the main calculations. Furthermore, every calculation is conducted with comments which can tell the company’s expenses and income that influence the profitability of the company. The recommendation is also given which
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$3.50 per patient. The Forecasted P&L Statement is shown below. Forecasted Columbia Walk in Clinic P&L Statement (For Year 2010) Total Revenues ($44.157 x 16,200) $715,356 Total Variable Costs ($3.50 x 16,200) $56,700 Total Contribution Margin ($40.657 x 16,200) $658,656 Fixed Costs $696,708 Profit $(38,052) Columbia Walk in Clinic Estimated Financial Data (For Year 2010) Number of Visits 16,200 Net Revenue $658,656 Net Revenue Per Visit $40.66
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“ Polysar Ltd Case” Brief Introduction to Polysar Limited Polysar Limited is the Canada’s largest chemical company and the world’s largest producer of synthetic rubber and latex and a major producer of basic petrochemicals and fuel products. The organization is structured into three groups: petrochemicals, rubber and diversified products; the rubber group accounts for 46% of Polysar’s sales, whose main products are butyl and halobutyl, and whose principal customers are tire manufacturers
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units to be sold over the break-even point and multiply that number by the unit contribution margin. Level: Medium LO: 1 Ans: T 2. Incremental analysis is generally the simplest and most direct approach to decision making. Level: Easy LO: 1 Ans: T 3. To facilitate decision-making, fixed expenses should be expressed on a per-unit basis. Level: Medium LO: 1 Ans: F 4. One assumption in CVP analysis is that inventories do not change. Level: Easy LO: 1 Ans: T 5. On
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