loss. But is that a problem for the parent company? We do not think so‚ if the Prestige Data Services does not exist anymore‚ the Prestige Telephone still have to pay for the cost such as: lease‚ maintenance‚ computer services...‚ but they get no contribution. In order to check if the data provided are relevant to make the decision at hand‚ the data has to satisfy the following criteria for it to be a relevant data. • It has to be an accepted future revenue or cost‚ • It must have an element of
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DISCUSSION Our group discuss about case 11-55. Below are the solution: Question 1 Prepare a new contribution report for February‚ in which: * The static budget column in the contribution report is replaced with a flexible budget column. * The variances in the contribution report are recomputed as the difference between the flexible budget and actual columns. Answer Particulars | Static Budget | Flexible Budget | Actual | Variance | Unit (pounds) | 200000 | 225000 | 225000
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Competition Bikes Inc. Storyline Managing Capital & Financial Assets 04/12/2014 WGU JET2 Financial Analysis Task 4 - PASSED To: Vice President The following is a summary report to recommend whether Competition Bikes should change its traditional costing method to activity based costing‚ and an analysis of the breakeven point with regards to sales units and dollars for both CarbonLite and Titanium bikes. It also discusses the impacts to the breakeven point. The cost-volume-profit evaluation
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If I could travel anywhere‚ I would go to... Egypt. The reason I would choose Egypt is to get a first-hand experience on the ancient method the Egyptians used to engineer structures. Their work was so exquisite and astonishing that it is crazy to think modern engineers find it nearly impossible to replicate them. Pyramids were the beginning of architecture and are considered to be the most precise structures know today. They had no modern technology and would generate the most precise masterpieces
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INCREMENTAL ANALYSIS TRUE-FALSE STATEMENTS 1. An important step in management ’s decision-making process is to determine and evaluate possible courses of action. 2. In making decisions‚ management ordinarily considers both financial and nonfinancial information. 3. In incremental analysis‚ total variable costs will always change under alternative courses of action‚ and total fixed costs will always remain constant. 4. Accountants are mainly involved in developing nonfinancial information
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Competition Bikes Finical Analysis Dan Petersen WGU – JET2 Finical Analysis Task 4 A. 1. To: Vice President This report has been prepared to argue the case that the company’s current costing method should be changed to the activity based costing method. This report will review; the difference between traditional based costing and activity based costing; traditional split and allocations with activity based costing; and discusses the breakeven point for Competition bikes Inc. with
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Prestige Data Services. Mr. Rowe believes it is possible the accounting reports do not reveal the contribution the Data Service has provided and also the accounting for separate activities may obscure the costs and benefits provided. Therefore we have used the exhibits provided to analyze and come to a conclusion whether Prestige Data services should be shut down or allowed more time to show its contribution. Analysis 1) The first thing we noticed is that fixed and variable costs are included in the
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3 Cost-Volume-Profit Analysis Learning Objectives 1. Explain the features of cost-volumeprofit (CVP) analysis 2. Determine the breakeven point and output level needed to achieve a target operating income 3. Understand how income taxes affect CVP analysis 4. Explain how managers use CVP analysis in decision making 5. Explain how sensitivity analysis helps managers cope with uncertainty 6. Use CVP analysis to plan variable and fixed costs 7. Apply CVP analysis to a company producing multiple
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Net profit=Sales revenue –Total costs - Break-even point (BEP) is the point of sales volume where the firm is not attaining any profit or loss. * Contribution approach - Contribution margin is the excess of total revenues over total variable costs. Unit contribution marginUCM=Selling price-Unit variable costs * Contribution can be also be expressed as a ratio to
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MERTON TRUCK COMPANY 1) No. of Model 101= x‚ no. of model 102=y.Unit contribution/model= S.P – (Variable costs + Fixed cost).For Model 101‚ variable cost=36000 /unit‚For Model 102‚ variable cost=33000/unit.Fixed cost for both the model= 8600000 Therefore‚ total contribution z=39000x+38000y-36000x-33000y-8600000Z=3000x+5000y-8600000 The Constraints are:Engine assembly: x + 2y <= 4000Metal stamping: 2x + 2y <=6000Model 101 assembly: 2x <=5000Model 102 assembly: 3y <= 4500x‚y>=0.Solving
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