Catfish Creek

Breakeven Analysis for Product Tylenol Approach 1 - Same price as Tylenol Approach 2a - Cheaper than Tylenol Approach 2b - Cheaper w/lowered trade cost $ $ $ $ Unit Cost (Variable Cost) 0.60 0.60 0.60 0.60 Trade Cost (Selling Price to Retailers) $ 1.69 $ 1.69 $ 1.05 $ 0.70 Fixed Cost (Advertising) 2,000,000 6,000,000 6,000,000 6,000,000 Break-Even Quantity [Fixed Cost/(Trade Cost-Unit Cost)] 1,834,862 5,504,587 13,333,333 60,000,000 Contribution Margin (Unit) 64% 64% 43% 14%

Determine the unit break-even point, assuming fixed costs are $60,000 per period, variable costs are $16.00 per unit, and the sales price is $25.00 per unit.

Because each product has a different contribution margin percentage, the volume required for each break-even point would be different and will not add up to the company’s overall break-even volume of 1,100,000 units; the overall break-even volume assumes that there is only one contribution margin percentage which is :

Department of Fish and Wildlife (DFW)- 31’Rid Hull Aluminum Vessel to be use to patrol and protect the California Coast with an estimate total cost of $456,066.

Monroe planned to produce 30 canoes in the first year and average one canoe every ten days, which would leave 65 days to buffer any unforeseen production delays[1]. Monroe would have to work seven days a week to maintain the production pace; however, he felt that he could handle a seven-day schedule for two to three years. Although the first canoes were scheduled to take almost 12 days to build, manufacturing time would gradually decrease. Monroe knew that he would have to invest in some equipment which would include an estimated $5,530 for power equipment and accessories; hand tools at $835; cutters, blades and bits at $800; benches, stands and cabinets for $1,600; forms and jigs for $160; and office equipment for $3,055. Monroe projected that variable costs would total $1,161 per canoe[2] and annual operating expenses would total $8,644[3].

Additional sales dollars to cover the advertising expense = Total Sales Dollars – Unit Price = $3.33 - $2.00 = $1.33

The break- even point is the level of activity (in units of output or sales revenue) at which total costs (fixed + variable) = total sales revenue (Atrill, McLaney 2008: p. 262). First all, we need to calculate contribution per unit for reaching to the break- even point. The pattern for calculate contribution per unit is sales revenue per unit less variable cost per unit. Subsequent we calculate the break- even sales units. Break- even sales units = fixed costs/ contribution per unit. We use the result of BEP unit for next step which calculate the break- even sales value: BEP units x selling price per unit. When we use every formulas, we attain the break- even point.

They start the company with a total of 2300 shares holding a cash value of $72000. The following financial statements summarize the current financial position of Marion Boats:

1. Assume that a company is budgeting to sell 2,500 units of a product at a selling price per unit of $32. The variable cost per unit is $26 and total fixed costs are $5,000.

It is important to realize that a company will not necessarily produce a product just because it is expected to break- even. Many times, a certain level of profitability or return on investment is desired. If this objective cannot be reached, which may mean selling a substantial number of units above break-even; the product may not be produced. However, the break-even is an excellent tool to help quantify the level of production needed for a new business or a new product. Once the break-even point is met, assuming no change in selling price, fixed and variable cost, a profit in the amount of the difference in the selling price and the variable costs will be recognized. One important aspect of break-even analysis is that it is normally

Study Objectives 1. 2. 3. 4. 5. Distinguish between variable and fixed costs. Explain the significance of the relevant range. Explain the concept of mixed costs. List the five components of cost-volume-profit analysis. Indicate what contribution margin is and how it can be expressed. Identify the three ways to determine the break-even point. Give the formulas for determining sales required to earn target net income. Define margin of safety, and give the formulas for computing it. Questions 1, 2, 3, 6 4, 5 6, 7, 8 9 10, 11, 17 5, 6 Brief Exercises 1 2 1, 3, 4 Exercises 1, 2, 3, 4, 5 1 2, 3, 4, 5, 6 7 6, 7, 8, 9, 10, 13 6, 7, 8, 9, 10, 11, 12 11, 13 1A, 2A, 3A, 1B, 2B, 3B, 4A,

PROBLEM 15.50 (40 minutes) Customer profitability analysis: manufacturer 1 Customer profitability analysis: Sales revenue Cost of goods sold Gross margin Selling and administrative costs: General selling costs General administrative costs Customer-related costs: Sales activity (8,6 x $1000) Order taking (15, 20 x $200) Special handling (800, 600 x $50) Special shipping (18, 20 x $500) Total selling and administrative costs Operating profit CaesarStream $190 000 80 000 110 000 24 000 19 000 8 000 3 000 40 000 9 000 $103 000 $ 7 000 NeroCom $123 800 62 000 61 800 18 000 16 000 6 000 4 000 30 000 10 000 $84 000 ( $22 200)

Contributing to the reputation that the brand has acquired as a builder of durable vessels, the SeaHunter Tournament 37 boat is constructed from a layered Kevlar fabric system. This is combined with

The erosion of 3000 units of bicycle through regular distribution channel will decrease the BB’s gross margin by $129,960 (110.05 per unit price less 66.73 variable cost). However, the lost contribution margin is also irrelevant cost in calculating the profit analysis of challenger’s deal, as this will occur no matter BB accepts the deal or not. Hi-Valu can approaches another manufacturer to produce the Challenger bicycle for them. The loss in sales is related with the launch of new bicycle in market and is not related with the manufacturing capacity constraints of BB. In fact, BB’s running at 75% of its capacity and can produce 125,000 bicycles a year. BB can still produce 100,000 (previously planned) bicycles for its regular

The following paper analyzes the Whitbread World Sailboat Race case scenario presented at the end of chapter 9 in the Gray and Larson text, Project Management: the Managerial Process. The project encompasses two main objectives; one, design, build and test a new vessel, and two, select and train a crew capable of winning the race. Both objectives must be completed within 45 weeks, the start of the race, and with a planned budget of $3.2 million.