1. Discuss the pros and cons to launching the Foxy brand in the United States. PROS: Launching the Foxy brand in the United States would be beneficial to the company because of the sheer size of the market. In comparison to the Canadian market‚ the U.S market is much larger and includes a larger number of consumers. In addition‚ those consumers are very interested in attaining nice but affordable products. American consumer culture is concerned with seeking out the lowest-cost‚ highest-quality
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Chapter 2 Questions 2-1. I agree with this statement. I would also like to add that cost behavior is also identifying the key resources that are performed‚ resources used in performing these activities‚ costs of the resources‚ and what the cost is driven from. 2-2. Two rules of thumb when analyzing cost behavior are to manage what the company manufactures‚ sells‚ and to give advice as to where costs can be reduced. 2-3. Three examples of a variable cost are a 12% increase in the production of
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Price taker: act on our margin When I go to a tailor: I buy time(labor‚ expertise ‚experience) and materials Raw material Work days Rent cost/ depreciation cost Transportation in Oursourcing cost Utility cost Design cost Advertisng cost Margin 20% Final price Dress 1 3000 200dh/ day 2000 400 100 500 30 1000 100 1426 Before margin: 7130 After margine8556 Dress 2 200 200/ day 400 400 100 0 30 0 - 228 Before margin:1140 After margin:1368 Can trace easily
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do not change‚ then: (Points: 5) Contribution Margin Per Unit - Increases‚ Contribution Margin Ratio - Increases‚ Break-Even in Units - Decreases Contribution Margin Per Unit - No Change‚ Contribution Margin Ratio - No Change‚ Break-Even in Units - No Change Contribution Margin Per Unit - No Change‚ Contribution Margin Ratio-Increases‚ Break-Even in Units - No Change Contribution Margin Per Unit - Increases‚ Contribution Margin Ratio - No Change‚ Break-Even in Units
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expanding it by 50% more space and selling staff. This move resulted in a five-year lease as well as extensive and expensive renovations. They also made some changes in product offerings and offered more sales potential at the cost of minor reductions in margins. During the year it took to complete the Hallstead’s renovation the industry started showing major changes toward internet based jewellery sales. Tiffany & Company‚ a business with an origin much like Hallstead Jewelers‚ grew into an international
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Case: CRU Computer Rental CRU Computer Rentals is a national computer rental company that has seen rapid growth since its inception in 1990. The company purchases computers‚ printers‚ monitors‚ and other peripherals and rents them out both for the long term and short term. CRU’s sales have begun to increase from the previous quarter‚ but profitability continued to decline. Although revenue was increasing‚ the decline in profit warranted further investigation into the root problem causing this occurrence
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d. to purchase grapes instead of mosto or bulk wine to ensure the quality of the product. A. The presentation below shows the Income Statement using the contribution margin approach to have a better view on the costs which are variable and fixed AZIENDA VINICOLA ITALIANA Income Statement (Contribution Margin Approach) For the Year 1993 Production Capacity – 871‚850 bottles Unit Cost In Lire
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205 hours 138 hours 343 hours 205 * $400 = $82‚000 138 * $800 = $110‚400 Contribution Margin Income Statement Intra-comp sales $82‚000 Commercial sales $110‚400 Total Revenue $192‚400 Less Variable costs Operations hourly wage ($24*343) $8‚232 Sales Promotions ($4.70*343) $1‚612 $9‚844 Contribution Margin $182‚256 Less Fixed costs Space costs $9‚240 Equipment costs
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000 Formula : Revenue = Units Sold * Unit price Contribution Margin = Revenue – All Variable Cost Contribution Margin Ratio = Contribution Margin/Selling Price Break Even Points in Units = (Total Fixed Costs + Target Profit )/Contribution Margin Break Even Points in Sales = (Total Fixed Costs + Target Profit )/Contribution Margin Ratio Margin of Safety = Revenue - Break Even Points in Sales Degree of Operating Leverage = Contribution Margin/Net Income Net Income = Revenue – Total Variable
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example‚ SDS’s fixed costs were $212‚939 which were 95% of the costs for the month‚ while SDS’s variable costs‚ comprised only of power usage and hourly wages‚ were only 5% of the monthly costs. Again‚ using March 2004 as an example‚ SDS’s contribution margin was 95%‚ which indicates that $0.95 out of every $1 of revenue went toward fixed costs. Since we are unable to change the SDS’s fixed costs in the short term and also reducing fixed costs would in turn decrease SDS’s billing capacity‚ the
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