A budget is how a business manages their money by predicting the amount the company is going to spend. The two types of budgeting our: * Zero budgeting – Urban Fashion will not know how much items is going to cost as the board of directors would not give them a specific amount to spend * Allocated budgeting – Urban Fashion know how much the budget is that they would have to pay things. In economics‚ fixed costs are business expenses that are not dependent on the level of goods or services
Premium Costs Variable cost Cost
3.2 explain the calculation of unit costs and make pricing decisions using relevant information Pricing is depend on the unit costs‚ consumer capability and the breakeven analysis‚ To perform the breakeven analysis and to calculate the unit cost ‚we should consider about the two relevant costs. Those are fixed costs and variable costs. Fixed costs – Costs that will not change with in a period of time . ex- Machineries‚ Insurance. These are the essential costs that should be considered at the
Premium Costs Cost Economics
production and sales are: 2‚000‚ 4‚000‚ and 1‚000 cases of 4‚ 8‚ and 12 ounce bottles‚ construct of lotion bundle to consist of 2 cases of 4 ounce bottles‚ 4 cases of 8 ounce bottles‚ and 1 case of 12 ounce bottles. The following table calculates the breakeven number of lotion bundles to break even and
Premium Costs Variable cost Total cost
Gillette Safety Razor Division: Case Write Up Overview Ralph Bingham‚ VP new business development of Gillette Safety Razor Division (SRD) needs to decide whether to enter the rapidly growing blank recording cassette market. He is assessing whether Gillette can use its strengths in high volume manufacturing and marketing of mass distributed packaged goods to assume a leadership position in this new market. I recommend Gillette avoids entering this market Analysis The SRD commissioned consultancy
Premium Compact Cassette Magnetic tape Marketing
quantitative analysis which showed that the OO segment is more profitable than the MM segment. Considering the $1000 acquisition cost of OOs and their current pricing‚ the breakeven for this segment is 2 months. In addition‚ the lifetime revenue for the OOs is estimated to be $1.3M (Exhibit B). In contrast‚ the breakeven time calculated for the MMs is 9 months with an estimated lifetime revenue of $1.6M. In addition to quantitative analysis‚ we also considered qualitative factors in determining
Premium Marketing Customer service
you should be able to: * Describe the differences between the accountant’s and the economist’s model of cost volume profit analysis. * Apply the cost volume profit approaches in the calculation of breakeven point‚ margin of safety‚ target selling price and sales volume. * Construct breakeven‚ contribution and profit volume graph. * Apply cost volume profit analysis in a multi product setting * Identify and explain the assumptions and limitations of cost volume profit analysis. INTRODUCTION
Premium Variable cost Costs Fixed cost
PART 4A DECISION THEORY AND INFORMATION SYSTEMS 261 QUESTIONS [Fact Pattern #1] Stewart Industries has been producing two bearings‚ components B12 and B18‚ for use in production. B12 B18 ------ ------ Machine hours required per unit 2.5 3.0 Standard cost per unit: Direct material $ 2.25 $ 3.75 Direct labor 4.00 4.50 Manufacturing overhead: Variable
Premium Costs Variable cost Total cost
products sold Unit Contribution Margin: p – v Total Contribution Margin: (p - v) *Q Contribution Margin Ratio: (p-v) /p Breakeven Point: The point at which revenues equal total cost‚ and the profit is zero. * Equation Method: p*Q = f + v*Q * Contribution Margin Method Breakeven in Units: Q = f / (p-v) (Fixed expenses / CM per unit) Breakeven in Dollars: Y = p*Q = p*f / (p-v) = f / [(p-v)/p)] (Fixed expense/CM ratio) determine the sales volume needed to achieve a
Premium Variable cost Contribution margin Costs
No adjustments were made to the budget for the month of May after the contract was lost in April. Financial Analysis: Budget versus Actual One important thing to consider when looking at the budget versus the actual sales numbers is the breakeven point. This is the point at which expenditures and revenues equal zero‚ so while there is no profit‚ there is no loss‚ either. This calculation is considered an important statistic for businesses to know and
Premium Variable cost Costs Fixed cost
Answer Key for Test Your Skills 1. Tutti’s Sandwich Shop has the following information regarding costs at various levels of monthly sales. Help Tutti separate her costs into fixed costs and variable costs so that she can predict and evaluate costs at varying levels of guests served. January February March Monthly Sales in Guests Served 10‚000 16‚000 20‚000 Cost of Sales (Food Cost ) 10‚500 16‚800 21‚000 Salaries‚ Wages‚ and Benefits 15‚000 15‚600 16‚000 Telephone 12‚750 16‚350 18‚750 Rent on
Premium Costs Variable cost