strength of its brand equity‚ the strong demand for its products and its helpful salesforce. The company also used selective distribution policy which meant less competition among distributors and thus this policy preserved the distributors’ profit margins. Question 3: There are several possibilities here. The important ones (not counting no response) are: • Spend more resources in educating customers about the benefits of bubbles • Launch uncoated bubbles • Cut prices of the products
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CHAPTER 3 Overview Cost-Volume-Profit Analysis revenues and total costs behave. If decisions can be significantly improved‚ managers should choose a more complex approach that‚ for example‚ uses multiple cost drivers and nonlinear cost functions. 3. Because managers want to avoid operating losses‚ they are interested in the breakeven point calculated using CVP analysis. The breakeven point is the quantity of output sold at which total revenues equal total costs. There is neither a profit
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200 3‚480 Contribution Margin $ 236 $ 3‚000 $ 180 $ 3‚132 *in thousands of dollars *$400 x 95%= $380 *$380 x 17‚500 u= $6‚612 Air Comfort Division should institute the 5% price reduction on its air-conditioner units since the effect of this reduction would increase an additional of $132‚000 ($3‚132‚000-$3‚000‚000) to its Income before tax. The additional profit is caused by a sale increase of $432‚000 ($180 x 2‚400) in the contribution margin and a loss in contribution margin on original
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Five Star Tools Five Star Tools is a small family-owned firm that manufactures diamond-coated cutting tools(chisels and saws) used by jewelers. Production involves three major processes. First‚ steel “blanks” (tools without the diamond coating) are cut to size. Second‚ the blanks are sent to a chemical bath that prepares the tools for the coating process. In the third major process‚ the blanks are coated with diamond chips in a proprietary process that simultaneously coats and sharpens the
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units of laser printers per day‚ the older plant can produce 200 units per day. Variable cost per unit in Ogden is $110‚00; in Sandy variable cost is $15 higher. Selling price for the printer is $320‚00. Based on the data mentioned above the contribution margin per unit of normal production is $210‚00 in Ogden and $195‚00 in Sandy. Fixed costs per unit based on normal capacity are $70‚00 and $39‚00; total fixed cost is $4 200 000 for the Ogden plant and $1 872 000 for Sandy. In the circumstance when
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Foxy Originals 1. Discuss the pros and cons to launching the Foxy brand in the United States. To determine the pros and cons‚ we conducted a SWOT analysis: S(trengths) – Foxy Originals has saturated the Canadian market‚ which presents an opportunity for growth. The two owners have extensive experience in designing jewelry‚ having done so since they were in high school. They’re good at what they do and have had time to perfect their trade. They also have a firm grasp of who their target
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price per unit Expenses = the costs related to: the specific revenue (COGS) or the specific accounting period Matching Principle Role of Management is: Planning‚ control and performance measurement‚ and decision-making Decision-making relates to future events and involves risk Full costing (full-absorption costing) is a good historical tool but may not Be the best indicator of future activity because it is based on past events. Cost Behavior Variable
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was the rate of return for owning Serox in the most recent year? (Round to the nearest percent.) 32% 16% 12% 40% 5 The process of evaluating financial data that change under alternative courses of action is called: contribution margin analysis cost-benefit analysis double en... Complete course guide available here - https://bitly.com/1wyRXZE If you are returning to
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Executive Summary Five Star Tools is a family owned manufacturing company that manufactures chisels and saws used by jewelers. They produce the tools utilizing a 3 step process. In the past two years the company has experienced significant growth and at times has not been able to meet order deadlines. Management has identified that they have a bottle neck in the coating and sharpening process. Overview The president of Five Star Tools‚ Maxfield Turner decided to meet with the vice president
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revenue hour is $28.70/hr Question 3 - Price per unit is $400/hr internal and $800/hr external - Intracompany contribution margin: $371.30/hr - Commercial contribution margin: $771.30/hr Assume STC will fully utilize their allowable hours. The next allowable hour will be a commercial hour; therefore we consider the contribution margin to be the commercial contribution margin of $771.30/hr. Question 4 Break-even occurs when revenue equals costs so we used the following equation:
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