Case Study 1 Essay

When the discount rate increases from 15% to 40%, the company faces a 37.3% drop in its total value. The loss will be $5,609,132. the largest difference rate comes from the silver segment. Firstly, the silver segment has the most significant amount of customers. The requirement of being a silver customer is small ( fly with the Northern Aero at least one time). Secondly, each year some of the customers will degrade from the platinum or gold segment to the silver segment. Due to the

New Contribution Margin = New Price per unit – Variable cost per unit =$8.5-$2.5 =$6

15) Refer to the table. What is the average number of customers waiting to be served?

70% of seats are sold at the lowest two fares.30% of seats are charged at higher fares. The last 6% are sold at the highest fare

1. The local Mastermind store sells innovative educational toys. Part of their service is giving advice to customers about the best toys for a particular age group, which requires having more customer service representatives in the store. During the month long Christmas buying season, it makes half of its $500,000 yearly sales. Its contribution margin on average is 40% and its fixed costs for the year are about $150,000. The owner believes that she could make even higher sales, if she had more customer service representatives on the floor during the peak season. She plans on hiring four more people for 200 hours each at $20 per hour. How much additional revenue does she have earn to the nearest dollar

2. How many passenger train cars must Springfield Express operate to earn pre-tax income of $ 120,000 per month on this route?

If Marlene Herbert were to discontinue place mats, he would miss $270,000 that will go toward Mendel paper company fixed cost. The company currently has a plant overhead that is estimated at $420,000 for the quarter. In addition to the fixed plant overhead, the plant incurs fixed selling and administrative expenses per quarter of $118,000. This draws the company to a total fixed cost of $538,000. If Marlene Herbert were to discontinue the second highest contributor to the fixed cost, he would need to increase the volume of computer paper and lower material cost to help pull the contribution margin of the lowest product up to help support the lost of a whole product line.

2.) For each expense that is variable with respect to revenue hours, calculate the cost per revenue hour.

The goal of any small business is to do efficiently as many jobs as possible, this will increase profits. A 70-inch mower is new technology in the landscaping industry. The difference in the price of this technology is about $15,000 each. The number of employees that will be affected will be 4. These people would lose their jobs or have their hours cut in

Considering that an average ticket price is $1500 and the cost per passenger is $200, each sold ticket generates $1,300 of the positive cash flow. Since $295,000 of the initial capital had been spent by November 14th, the following minimum number of passengers must sign up in order for Health Cruises to break even provided no more money is invested:

b. Use your answer to part A to determine the total annual indirect cost assigned to:

In the case study, as the annual fixed cost is $6,000,000 and the contribution margin per event is $1,900. Therefore, the breakeven point is at the 3,158

The fixed cost of VG is about $150 million. The cost for the trip is expected about $100 thousand to $130 thousand per person, so the contribution is from $100 thousand to $70 thousand per traveler. The break-even points of VG are expected to fluctuate from 1500 to 2143. This means that in terms of conservative analysis, VG can get profits only after 2143 customers enjoy the suborbital trip. While the optimistic way showed that the necessary amount of customers is only 1500.

Since 1987, managing the three-way tensions of ensuring profitability and acceptable quality had been the job of the Public Transport Council (PTC), which regulates transport fares for both buses and trains. In today, according to ‘Fare Review Mechanism Committee Final Report (2013)’ (Anon., 2013) the PTC implements a cap on annual fare adjustments which is based on the formula.

Etihad Airways on its fleet determined to Abu Dhabi Australia route, consists of, sevenA340-600 Airbus with 292 passenger capacity, and V Australia the international carrier of Virgin Blue with its three Boeing 777-300ER, considering the total costs for the flight, as the homogenous fleet will have lower operating costs that would have effect on the fare price. For that reason, Etihad has to fill most of the seats on the plane in sense of covering the operational costs. Depending in two variables: ‘Load factor’ the plane seating capacity that is actually sold, whereas, it was 74% for this route in the last year, and ‘Yields’ the revenue obtained for flying one passenger over one kilometer, while it increased by 20.1% year on year. Hence, using the load factor by Etihad as an indicator by its marketing department supporting its pricing strategy, hence the high load factor over (85%) is considered as a sign for Etihad to focus on low yields. For instance, by offering lower prices for this route, as the number of seats sold goes up depending on the effectiveness of its promotion activities the fare goes down. However, it has to cover up the operational cost either by high or low fare prices for its profitability. Moreover, usually it happens that two passengers