increases in profits, they will come from volume increase. At the same time, selling prices, sales mix, unit variable cost, and fixed costs will not change. Background A, B, and C are the three product lines of Duo-Products Corporation. Even though the company was profitable last year, only two out of its three products performance made a contribution to the company’s profits. In addition, the demand from the union for a pay raise is expected to cause an increase in costs. This will have
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this chapter: Variable costs Relevant range Contribution margin Break-even point Fixed costs Semivariable costs Economies of scale Sales mix Unit contribution margin Each of the following statements may (or may not) describe one of these technical terms. For each statement, indicate the accounting term described, or answer “None” if the statement does not correctly describe any of the terms. a. The level of sales at which revenue exactly equals costs and expenses. Break-even
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Boston Creamery Case Solution MBA 611 Ryan Grady In 1973, after the installation of a new financial planning and control system at Boston Creamery, the ice cream division showed a favorable operating income variance of $71,700. In developing the profit plan for 1973, division president (and resident moron) Jim Peterson made the first of a series of inexcusable errors in budgeting surrounding the mythical “favorable” condition. He simply used expected results for the preceding year (as obtained
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* “Moderate” and “Budget” classifications: a. Volume: 6 Million Units b. Market Share = 80% of active-wear market ii. 2009 Industry Sales Volume Estimates: * Expected growth rate: 4.2% * Active-wear sales volume estimated at 15 million units * 200% growth from 2007 * Women’s active-wear in “Better” classification: a. Volume: 6,000,000 Units b. Market Share: 40% of active-wear
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at Southwestern University Football Games The total fixed cost per game includes salaries, rental fees, and cost of the workers in the six booths. These are: Salaries $20,000 Rental fees 2,400 $2 $4,800 Booth worker wages 6 6 5 $7 $1,260 Total fixed cost per game $20,000 $4,800 $1,260 $26,060 The cost of this allocated to each food item is shown in the table: Percent Allocated fixed Item revenue cost Soft drink 25% $6,515 Coffee 25% $6,515 Hot dogs 20%
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Avoid The Death Spiral Of Permanently Lost Profit, Declining Value And Heightened Price Sensitivity Why to avoid price wars * Reducing prices is not a sound strategy unless you have a 30%+ cost advantage. * Slashing prices is the easiest strategy to copy. * Competitors respond in a day or two to any price move. * A 10% drop in US cigarette prices would need to lead to a 50% increase in volume (assuming unchanged costs) for Trading Profit to be unchanged. This implies a price elasticity
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Concepts Marginal Cost This is the variable cost of one unit of product or a service. Marginal Costing It is a principle whereby variable cost are charged to cost units and fixed cost attributable to the relevant period is written off in full against contribution for that period. Absorption Costing A method of costing by which all direct cost and applicable overheads are charged to products or cost centres for finding out the total cost of production. Absorbed cost includes production
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Almost all the countries in the world allow foreign companies to compete with domestic firms nowadays, which make the costs of spending in the international trade plummet over the past decades. However, global markets provide more potential for the competitive companies. In other words, the companies have to face more challenges. If they can’t win the game, they will vanish from the global market. It is not a game winning by the capital; it is a competition with wisdom, good customer service, and
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ACC 220 WEEK 6 CHECKPOINT To purchase this visit here: http://www.nerdypupil.com/product/acc-220-week-6-checkpoint/ Contact us at: nerdypupil@gmail.com ACC 220 WEEK 6 CHECKPOINT CheckPoint: Cost, Volume, and Profit Questions Writea 200- to 300-word response that addresses questions 7, 9, & 14 in the Questions section on p. 284–285 of the text. Home Work Hour aims to provide quality study notes and tutorials to the students of ACC 220 Week 6 Checkpoint in order to ace their studies. ACC
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guidelines are: Cost-benefit analysis, behavioral considerations and technical considerations, and different costs for different purposes. Galway Co. management desires cost information regarding its Celtic brand. The Celtic brand is a(n) cost object. Cost objects are anything for which a measurement of cost is desired The cost of a product can be measured as any of the following except as one b. identified as period cost Which of the following is not a factor in cost-volume-profit analysis? c.
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