CD unit | $6.40 | B. Break-Even volume in CD units Fixed Cost: | | | | | | Advertising | $275,000 | | Break-Even in Units | | Overhead | $250,000 | | $525,000 | = 82031.25 | units | Total | $525,000 | | $6.40 | | | | | | | | | Contribution per CD Unit | $6.40 | | | | | Break-Even Volume in Dollars Break-Even (Units) * Selling Price | 82.031.25 * $ 9.00 = | $738,281.25 | C. Net profit if 1 million CDs are sold $ 9.00 * $1,000
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business environment. The cost-volume-profit analysis does vital role in managerial accounting as the CVP analysis can be used both products and services, and answers various questions pertaining to profitability of the company products or services. Its deals with three elements. The first factors is cost which incurred to make product or services, the second factors is volume which focus on number of units of product sold in a specific period of time The third factors is profit which basically selling
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pushing their brands. By being more cost efficient in their processes than their competitors, the organization will gain an advantage over their competition. The basis for competing in this new era will be: Competitive Advantage = Product Excellence x Process Excellence. - Globalization of industry: Companies are seeking world markets for its products, then develop a manufacturing process to support its marketing. Companies are in search for low labor costs, however, in doing so they tend to
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considered.) To determine if Lille Tissages, S.A. should lower the price to FF15.00/m or not we need to consider the Variable costs and the Contribution margin associated with Item 345. Variable costs: “Variable costs are costs that vary with the volume of activity”2 and they are: direct labor, Materials, Material spoilage & direct department expenses. Fixed costs: “Fixed costs are those that are independent of the level of activity”3 and they are: indirect department expense, Selling and Administrative
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For any operating business, the primary goal is not just to earn profit but also to maximize their profit margins. As normal convention dictates profit as the difference between revenue and cost, how much profit an entity makes depends largely on how much revenue it earns. Therefore, price and quantity of goods sold are the two most direct influence on the profit of every entity and this makes a not only accurate but also strategic pricing decision a necessity for any business that wants to thrive
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Customer profitability analysis: manufacturer 1 Customer profitability analysis: Sales revenue Cost of goods sold Gross margin Selling and administrative costs: General selling costs General administrative costs Customer-related costs: Sales activity (8,6 x $1000) Order taking (15, 20 x $200) Special handling (800, 600 x $50) Special shipping (18, 20 x $500) Total selling and administrative costs Operating profit CaesarStream $190 000 80 000 110 000 24 000 19 000 8 000 3 000 40 000 9 000 $103 000 $ 7 000
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French had done was to determine the level of operation at which the company must operate at which the company must operate in order to break even. As he phrased it,”The Company must be able to at least sell a sufficient volume of goods that it will cover all of the variable costs of producing and selling the
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Colorado, Manwinder Singh, Amanpreet Mann SUBMITTED TO: Prof. Ting He CASE: Wilkerson Company Introduction Wilkerson Company is in the business of manufacturing valves, pumps and flow controllers. Wilkerson is currently faced with declining profit margins relative to industry competitors. Severe industry wise price cuts in the pump business, which is Wilkerson’s major product line, has badly affected the company’s margins (Gross margin below 20% as against a planned gross margin of 35%). The
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to allocate his indirect expenses. His staff was complaining that the current method of taking a percentage of revenues was unfair. He decided to try to allocate utilities based on square footage of each department, administration based on direct costs, and laboratory based on tests. Use the information in the chart below to answer problems 22, 23 and 24. | |Square Footage |Direct |Lab Tests | | |
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pricing element of A ldi’s mix? Low cost, low price. Save money.Marketing change for Aldi. People do not have expect high quality things. Aldi is acceptable "good value". For example we don't argue for a 2 dollars bottle from Aldi. 2. Price is determined at the lower end by costs and at the upper end by what the market is prepared to pay for it (market demand). Between these constraints what other variables impact on price setting? eg: Costs • competion • Government
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