price);sale price variance=(actual selling price-budgeted selling price)*actual sales volume;sale volume variance=(actual sales volume-budgeted sales volume)*budgeted selling price; net sales volume variance=(actual volume-budgeted volume)*budgeted contribution margin; 20-profit=total revenues-total cost; markup on cost base=(cost not included in the base+desired profit)/costs included in the base; 19-inventory turnover=annual demand in units/average inventory in units (or) COGS/ average inventory
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series otherwise it will lose the market share in the business. 3. Berkshire’s most profitable product line is the 100 series. It costs them about 1.68 to produce 100 units and they sell 100 units for 2.45. This is a .73 per hundred unit contribution margin. Even if you include the
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expenses | | $ 12,000.00 | 60% | $ 12.00 | | | | | | Contribution Margin | | $ 8,000.00 | 40% | $ 8.00 | | | | | | Fixed Expenses | | $ 6,000.00 | | | | | | | | Net operating income | | $ 2,000.00 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 1. | Total contribution margin | | $ 8,000.00 | | | | | | | | Total units sold
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giving advice to customers about the best toys for a particular age group, which requires having more customer service representatives in the store. During the month long Christmas buying season, it makes half of its $500,000 yearly sales. Its contribution margin on average is 40% and its fixed costs for the year are about $150,000. The owner believes that she could make even higher sales, if she had more customer service representatives on the floor during the peak season. She plans on hiring four
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1. | Question : | (TCO A) Wages paid to an assembly line worker in a factory are a | | | Student Answer: | | Prime Cost YES.....Conversion Cost NO. | | | | Prime Cost YES.....Conversion Cost YES. | | | | Prime Cost NO....Conversion Cost NO. | | | | Prime Cost NO.....Conversion Cost YES. | | Instructor Explanation: | Chapter 2 | | | | Points Received: | 6 of 6 | | Comments: | | | | 2. | Question : | (TCO A) A cost incurred in the past
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3,902 (F) 153,522 Advertising Ex. 28,412 764 (F) 27,708 Trans. Out 3.967,962 98,349 (F) 3,869,612 Contribution Margin 1,279,489 31,716 (U) 1,247,773 Fixed Manufacture Ex. Depreciation 150,000 -------- --------- Total Fixed Man/Exp. 150,000
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BREAK EVEN POINT: | 500 | | Therefore, 500 windows would have to be sold to make the break-even point. C.) Number of windows to be tinted to earn an income of $14,000: FORMULA: | FORMULA EXPLAINED: | 16x-8000=1400016x=22000x= 1375 | (contribution margin times X number of units, less $8000 fixed costs = $14,000 income) | | Checking my numbers: | | $8,000 | fixed | | $26,125 | $19 each variable * 1375 units) | | $34,125 | total costs | | $48,125 | net sales for 1375
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(disregard everything beneath the line titled "income from operations")? Which expenses shown on page 50 appears to have been reclassified as variable selling costs on page 33? 2. Why do you think cost of sales is included in the computation of contribution margin on page 33? 3. Perform two separate computations of Benetton's break even point in euros. For the first computation, use data from 2003. For the second computation, use data from 2004. Why do the numbers that you computed differ from one
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CMR ENTERPRISES Q1: How profitable is Blackstone business? Solution: Commercial: * Contribution margin = 48% * Variable cost=52% * COGS = 34% * Other variable overhead = 18% Residential: * Contribution margin = 38% * Variable cost = 62% * COGS = 26% * Other variable overheads =36% In year 1: Monopoly enabled CMR to gain 25% of its residential revenues from Blackstone customers In year 2: Increased prices by 7% resulting in overall increase of 15-20%
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1.) Total Contribution Margin/Total Revenue= Total Weighted Average Contribution Margin 3,500,000/4,763,000=0.735=73.5% 2.) The size of the weighted average contribution margin indicates that the coverage of fixed expenses and the change in the profits are very sensitive to a change in revenue dollars. Since Bridgestone has a high weighted average contribution margin, every revenue dollar will have a large impact on the ability to cover fixed expenses and to create a profit. 3.) Breakeven
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