The following worksheet contains cost and revenue data for Shop 48 and is typical of the company’s many outlets: | Per Pair of Shoes|
Selling price| $ 30.00 |
| |
Variable expenses:| |
Invoice cost| $ 13.50 |
Sales commission| 4.50 |
Total variable expenses| $ 18.00 |
| |
| Annual|
Fixed expenses:| |
Advertising| $ 30,000 |
Rent| 20,000 |
Salaries| 100,000 |
Total fixed expenses| $ 150,000 |
* Calculate the annual break-even point in dollar sales and in unit sales for Shop 48. Unit sales to break even = Fixed expenses / Unit CM
$150,000 / 12 = 12500
Dollar Sales to break even = Fixed expenses / CM ratio
$150,000 / 0.40 = $375,000
* If 12,000 pairs of shoes are sold in a year, what would be Shop 48's net operating income or loss? The company is considering paying the store manager of Shop 48 an incentive commission of Shop 48 an incentive commission of 75 cents per pair of shoes (in addition to the salesperson's commission). If this change is made, what will be the new break-even point in dollar sales and in unit sales? $18.75 ($18.00 + $0.75) per pair

Contribution margin will be $11.25 ($30.00 – $18.75) per pair. Profit = Unit CM × Q − Fixed expenses
$0= ($30.00 − $18.75) × Q − $150,000
$0= ($11.25) × Q − $150,000$11.25
Q= $150,000
Q= $150,000 ÷ $11.25Q= 13,333 pairs (rounded)
13,333 pairs × $30.00 per pair = $400,000 in sale

1. Net operating income or loss for 12,000 pairs of shoes:
Sales $360,000
Variable Expenses ($216,000)
Contribution Margin $144,000
Fixed Expenses ($150,000)
Net Operating Loss ($6000)
2. Break even point in dollar sales for 12,000 pairs:
Fixed expenses / CM ratio = $150,000 / 0.40 = $375,000
3. Break even point in unit sales for 12,000 pairs:
Fixed expenses / unit CM = $150,000 / $12 = 12,500
* Refer to the original data. As an alternative to (4) above, the company is considering paying the store manager 50 cents commission on each pair of shoes sold...

...
Case: Mendel Paper Company
BUS630 Managerial Accounting
Dr. John Kuhn
Case: Mendel Paper Company
Mendel Paper Company produces four types of paper products. These paper products consist of computer paper, napkins, place mats, and poster board. In the exercise given we were to compute the estimated contribution margins for each product line with the information given in the text. My calculations are listed in the chart below:*** (which...

...BUS630 WEEK 1 Ashford University MANAGERIAL ACCOUNTING:
This week students will:
1. Explain the primary ethical responsibilities of the management accountant.
2. Illustrate the key principles of managerial accounting including cost concepts.
3. Distinguish between the behavior of variable and fixed cost.
4. Explain the significance of cost behavior to decision making and control.
5. Determine the necessary sales in unit and...

...BUS 475 Week 4 Knowledge Check
1. A fast-food restaurant asks customers to evaluate the drive-thru service as good, average, or poor. What level of data measurement is this classification?
Nominal
Ordinal
Interval
Ratio
Click here to download BUS 475 Week 4 Knowledge Check
2. In order to determine the average amount spent in November on Amazon.com a random sample of 144 Amazon accounts were selected. The sample...

...
Business Model and Strategic Plan Part III
Shawn Good
BUS/475
October 27, 2014
Fredric Hibbler
Introduction
The balance scorecard is another tool that goes along the same lines as the strength, weakness, opportunity, threat, and trend or commonly known as SWOTT. The information in this document will cover the basic aspects of the balance scorecard.
The balance scorecard method will cover four main areas or quadrants and those are: shareholder value or financial...

...BUS 599 Assignment2 Executing Strategies in a Global Environment: Examining the Case of Federal Express
IF You Want To Purchase A+ Work Then Click The Link Below , Instant Download
http://hwnerd.com/BUS-599-Assignment-2-Executing-Strategies-in-a-Global-Environme-1245.htm?categoryId=-1
If You Face Any Problem Contact Us At Contact.Hwnerd@Gmail.Com
Assignment2: Executing...

...assembly, weld and test $100,000 divided by 20,000 hours =5
Compressor parts fabrication $120,000 divided by 5,000 hours =24
Compressor assembly and test $180,000 divided by 45,000 hours =4
Total $480,000 divided by 80,000 hours =6
Question 2.
In Question 2 the calcualation is to compute a company wide overhead rate using machine hours as the cost driver. In order to calculate this answer we must com...

...Running Head: Chapter 9 Closing Case-Bunyan
Your Name
BUS650: Managerial Finance
Dr. Stanley Atkinson
January , 2013
The question asked of us this week sounds so simple “When should the company harvest the forest?” however as you begin to answer the question you discover just how complex it really is. In order to forecast correctly Mr. Boles must compute many different factors.
REVENUES
Mr....

## Share this Document

Let your classmates know about this document and more at StudyMode.com