Word document. 1. You want to use break-even and target profit analysis with respect to the introduction of a new product in the marketplace. Your manager says you are wasting your time because the best determination of profitability is the income statement after this product has been introduced. Explain why your manager is wrong. In order to fully understand the process of profitability within a business‚ we must understand what break-even and target profit analysis represent and the function that
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1. Operations wages for hourly personnel and office equipment and fixtures are the only variable cost with respect to revenue hours. All other costs are fixed with respect to revenue hours. With higher fixed cost‚ Salem Data Services has a higher leverage and is therefore riskier. 2. ($7‚896 + $1‚546) / 329 hours = $28.70 / hour. For every hour spent working‚ the company spends 28.70 dollars. 3. Intracompany Commercial Total Number of Hours (a): 205 138 343 Revenue (a x b): $82
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Contribution Margin and Break Even Point by ACC 202 Trident University July 22‚ 2011 Contribution Margin and Break Even Point I’m going to discuss Contribution margin and what it is and how it relates to companies and profits. Contribution margin is the amount remaining from sales revenue after variable expenses have been deducted. It is the amount available to cover fixed expenses such as lease agreements and then to provide profits for the period. Contribution margin is first
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3.3 Evaluate break-even analysis as a decision-making tool. The definition of the Break-even analysis: The break-even analysis is an analysis of a product or company’s sales required to neither lose money nor make a profit‚ but simply to cover costs. Explain in mathematical term: total revenues – total costs = 0. The methods: By using a break-even formula or by drawing a break-even chart. Why is it so important using a break-even analysis? Because it gives vital information about a business or
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depend on the price offer by suppliers and volume of service provided. From the figure 1‚ revenue per month is estimated as RM15375. Figure 1: Estimated Revenue per month 7.1 Break-even Analysis Figure 2: Break-even Analysis Based on the break-even analysis‚ we have to serve 160 customers in order to break-even. Our monthly sales must hit RM20800 to cover all the costs. From the statement of cash flow‚ Adorable Pawz start making profit at the 7th month of operation. 8.0 Managing
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consideration. On the other hand‚ if the promotion expense exceeds 1‚548.72‚ the net income will turn into negative. However‚ as long as it is more profitable than -$30‚383‚ option 3 is the optimal choice. Since option 1 and 2 make their net income even worse and option 3 requires them to spend very little on promotion‚ there is a suggestion to close SDS instead of keeping it. However‚ if they close SDS‚ the change in their net income will be: Exhibit 5 They will save costs in maintenance‚ power
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Pennington; Robin; McLamb) Case Study Salem Telephone Company The purpose of creating the subsidiary is twofold: (1) to keep telephone customers from having rate increases and (2) for Salem Telephone to plan‚ control and make decisions on performance of its operations in the area served. Planning would involve a financial budget and the level of profit needed. Control would be the measurement and comparison of actual to estimated budget analysis of management’s performance in controlling
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Cost-Volume-Profit and Break-Even Analysis Your Name ACC/561 October 12‚ 2011 Andrea Dixon Cost-Volume-Profit and Break-Even Analysis Snap Fitness Owning a business is an expensive and risky venture‚ but buying a franchise is one way to lower the risk and build confidence in the success of that new business. As a ‘no-frills’ type of fitness center‚ Snap Fitness offers its customers convenient‚ 24-hour access‚ hassle-free work outs without an annual contract. The company offers assistance
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The Telephone About 100 years ago‚ Alexander Graham Bell invented the telephone by accident with his assistant Mr. Watson. Over many years‚ the modern version of the telephone makes the one that Bell invented look like a piece of junk. Developments in tone dialing‚ call tracing‚ music on hold‚ and electronic ringers have greatly changed the telephone. This marvelous invention allows us to communicate with the entire globe 24 hours a day just by punching in a simple telephone number. It is the
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of the contents of the document. Type the abstract of the document here. The abstract is typically a short summary of the contents of the document.] | Kassandra Bartlett EAC150BF October 2‚ 2012 In Class Essay Dorthey Parker’s story‚ “A telephone Call” is a monologue of a very common situation; a young woman desperately awaiting the expected call from a man‚ who she is very much infatuated with. This woman is in constant battle with her contradicting thoughts‚ based around the man’s use of
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