North Country Auto, Inc

d) Break even sales change that would change the profits by the same amount as a reduction in price.

In order to break even, the minimal quantity of cars to sell at the average retail price $102,500 (($109,000+$96,000)/2) for the first year is

A2 Auto Corporation is one of the world’s largest manufacturers and distributors of automobiles and automobile ancillary parts. In its Form 10-K, filed with the SEC, the following information was disclosed.

As for cost structures for this industry, the fixed costs are going to consist of machinery and equipment in order to produce the automobiles. These fixed costs also serve as a barrier of entry into the industry; small firms will not be able to afford the fixed costs. For the variable costs, labor, materials, and advertising are going to be the main costs (Investopedia, 2009). These costs also change according to the output produced; whether the companies cut back on production or increase in production. These costs don’t serve so much as a barrier of entry into the industry, but in order to compete in this industry, an entering firm must come up with them on an extremely large scale.

While we are performing our analysis on different aspects of the company, we look at the three main types of cost. When we remain devoted to improving our costs, and the faults related, we show our same devotion to our consumers. This is portrayed by the quality of products we put on the shelves. Prevention costs, appraisal costs and Failure costs are areas

Henderson Printing is a small-to medium sized firm that manufactures account books, ledgers, and various types of record books that are used in business (Long, 2010, p. 512). This company’s compensation system will be analyzed based on the five contextual variables as discussed in the textbook. The environment in which Henderson Printing operates can be classified as stable, as well as simple. This can be justified, as the company produces stable annual sales, thus it can be concluded that product lifestyles are not short, and product and service demand is constant (Long, 2010, p. 40). Additionally, the product/service provided is fairly simple, and the technology is not complex (Long, 2010, p. 512). The

We decided to decrease the price of mountain bike production from $134 per bike to $108. The difference of $26 for 11,000 units results in a saving of almost $300,000. In the meanwhile, we also decided to dump our finish goods inventory, incurring a loss of $175,000. We decided to increase our capacity from 20,000 to 27,500 and efficiency from 1,000,000 to 2,000,000. We want to avoid increasing capacity significantly in order to avoid low efficiency. At the same time we want to keep our wastage at a minimum. We reduced our retail margin for the bike and sports store to 20% while reducing the discount stores to 27%. These new retail margins

In our second assumption, instead of using the cost of goods per cases in 1986, we try to use the percentage it counts in the total expenses which is 50.4% and to find the sales needed to break-even. The detail of the calculation is shown in the answer for questions d. The result is that 95,635, a little bit higher than the estimated sales of 90,000.

Harburg Ltd. Epic Ltd. 20 27 9 13 14 25 29 28 22 30 10 30 4 5 6 11 28

As Motorking Corporation considers introducing its now “gas extender” product into the market, the management must consider various factors to determine if this is a good financial move. The production manager needs to determine if the product will generate a profit for the corporation, how much product is expected to sell to determine how much to produce and how much to outsource.

Given the use of each resource in the sales fulfillment cycle, determine the profitability of each customer.

To answer those questions, I will perform an evaluation on the corporate-owned store control system from budgeting, performance evaluation, incentives, and transfer pricing perspectives. Part King is a decentralized organization. Every corporate-owned store is a profit center. The stores buy auto parts from Part King and then sell them to the two segmentations: hobbyists and commercial customers. Profit is the difference between revenue and cost. Thus, profit center managers are evaluated in terms of

Wilfred Livingston the president of Crosby Manufacturing Corporation had called a meeting with the department managers to resolve the problem they have with their management cost and control systems (MCCS). In order to update the current MCCS and to increase the company’s

The current simple allocation approach is insurance premiums and sales commissions are tracked at the legal business unit entity and product line level to properly compensate sales agents. Certain support functions are only accounted for at the corporate level and are subsequently allocated to product lines and business units according to the number of policies outstanding. Along with the recent development trend, Hampton thinks that this approach cannot reflect the claim on resources that is made by various business units and product lines. She also realizes that although sales volume has increased, profitability declines. So a new approach is necessary and extremely urgent. Better and appropriate allocation approach can help management obtain more accurate insight into product profitability, make correct product pricing decisions and so on.

a. Department Heads are to be aligned over a platform with allocation of KPI in their respective fields in the light of the strategic objectives.