Salem Telephone Company Case No. 9-104-086 Group #4 John Pipkin Resean Crawley Chan Srinivasa Brian Hamilton Question 1 The fixed cost associated with Salem Data Services are: Item Expenses Space cost: Rent Custodial services Equipment costs Computer leases Maintenance Depreciation: Computer equipment Office equipment and fixtures Wages and salaries Operations: salaried staff Systems development and maintenance Administration Sales Sales promotion Corporate services Total January February March
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ch03.qxd 9/27/04 4:06 PM Page 86 CHAPTER Q1 Q2 Q3 Q4 Q5 Q6 Cost-Volume-Profit Analysis In Brief Managers need to estimate future revenues, costs, and profits to help them plan and monitor operations. They use cost-volume-profit (CVP) analysis to identify the levels of operating activity needed to avoid losses, achieve targeted profits, plan future operations, and monitor organizational performance. Managers also analyze operational risk as they choose an appropriate cost structure. This Chapter
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Issues for Discussion 1. What is the weighted average contribution margin (WACM) percentage for Bridgestone’s next annual budget? WACM = Contribution Average/Total Revenue WACM = $3,500,00/5,000,000 WACM = 70% 2. What does a high weighted average contribution margin (WACM) percentage mean for the management of Bridgestone? 3. Is Bridgestone able to plan for breakeven or a modest over-recovery of expenses (or profit) for the next year? If the center achieves breakeven or a modest
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A presentation report on Cost–volume–profit analysis (CVP) Prepared for: Ms. Wahida Akther Lecturer Department of Business Administration Course code: ACC- 324 Course title: Taxation Prepared by: Group name: Exclusive NAME | ID | Omar Faruk | 1001010169 | Mirza Atiqul Hoque | 1001010182 | Minhaj Sultana | 1001010184 | Mushfiqur Rahman | 1001010186 | khairul Anam Choudhury | 1001010199 | Section:(D) 8th
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Chapter 02 Cost Behavior, Operating Leverage, and Profitability Analysis Multiple Choice Questions 1. | Java Joe operates a chain of coffee shops. The company pays rent of $20,000 per year for each shop. Supplies (napkins, bags and condiments) are purchased as needed. The manager of each shop is paid a salary of $3,000 per month, and all other employees are paid on an hourly basis. Relative to the number of customers for a shop, the cost of supplies is which kind of cost? A. |
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The Note on Marketing Strategy (9-598-061) describes the scope of marketing analysis needed to provide the basis for the development of a marketing strategy and the supporting implementation plan. The type of in-depth understanding of factors described there is often usefully supplemented by numerical analysis; at times, we need relatively complex, computer-supported analysis. At others, a low-tech approach utilizing the proverbial “back of the envelope” and maybe a calculator does the job.
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spreadsheets, the company can make changes to the flexible budget by only having to change the volume number. Irene Chin’s (Please note my last name is spelled Chin not Chan) Discuss how a flexible budget lends itself to a cost-volume-profit analysis (200 words) Flexible budget would increase or decrease dependent on the amount of work anticipated in a future period. In order for adjustments to be made analyzing volumes allows
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You are to read Kerin and Peterson Chapter 3 section (pp. 55-61) on decision analysis and perfect information as a primer (note that these tools are embedded in a discussion of general case analysis). For you margin analysis, you are given suggested retail pricing and associated distribution margins to derive the manufacturer’s selling price (Dermavescent Laboratories, Inc.). Your analysis should consider contribution margin per ounce. Note that the $10,000 supplier setup charge is a relevant
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MODULE 2, ASSIGNMENT 4 October 22, 2013 Topic: Standard Costing, Variance Analysis and Budgets Overview The main topics for Assignment 4 are standard costing, variance analysis, and budget creation. Accountants of all management levels often have to analyze variance reports in order to help in the decision-making process. Through the differentiation of costs into fixed and variable classifications, managers are better able to construct break-even charts and other decision-making and control
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CASE 3–18 Analysis of Mixed Costs in a Pricing Decision [LO1, LO2 or LO3 or LO5] Maria Chavez owns a catering company that serves food and beverages at parties and business functions. Chavez’s business is seasonal, with a heavy schedule during the summer months and holidays and a lighter schedule at other times. One of the major events Chavez’s customers request is a cocktail party. She offers a standard cocktail party and has estimated the cost per guest as follows: The standard cocktail
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