Contribution

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

Current Profit: $ 2500 New Price per additional unit: 0 New Contribution Margin = New Price per unit – Variable cost per unit =$8.5-$2.5 =$6 New Sales unit @40% additional sales= 5000*40%= 2000 Additional profit @40% additional Sales = Additional Sales* New Contribution Margin =2000*6 =$12000 New Sales unit @20% additional sales= 5000*20%= 1000 Additional profit @20% additional Sales = Additional Sales* New Contribution Margin =1000*6 =$6000 Steady: Sales: 5000 Price per unit: $10

Corporation produced and sold 80,000 units and reported sales of $4,000,000 during the past year. Management determined that variable expenses totaled $2,800,000 and fixed expenses totaled $720,000. What is the company 's contribution margin ratio? The company 's contribution margin (CM) ratio is determined as follows. CM ratio = CM ÷ Sales = (Sales – Variable expenses) ÷ Sales CM ratio = ($4,000,000 - $2,800,000) ÷ $4,000,000 = 30% -- Ashland Burglar Alarms Inc. sells a single product. The

1. List and briefly describe the advantages and disadvantages inherent to the food truck business model and as compared to traditional restaurants. Food trucks have exploded into mainstream American cuisine. Once thought of as a cheap meal available at odd times of the night, street food has become a vehicle for chefs on the rise to make their mark on the food industry. Operating a food truck may seem like an easy task, but it can turn out to be a tremendous undertaking and risky financial venture

Issues for Discussion 1. What is the weighted average contribution margin (WACM) percentage for Bridgestone’s next annual budget? WACM = Contribution Average/Total Revenue WACM = $3,500,00/5,000,000 WACM = 70% 2. What does a high weighted average contribution margin (WACM) percentage mean for the management of Bridgestone? 3. Is Bridgestone able to plan for breakeven or a modest over-recovery of expenses (or profit) for the next year? If the center achieves breakeven or a modest

For each distribution strategy, calculate the unit contribution and contribution margin rate for each of the two products line (necklaces and pairs of earrings). What is the weighted average contribution margin for an order at a trade show and an order with sale representatives? Trade Show | Sales ($) | Unit VC ($) | Unit Contribution Margin | Product Qty | Sales mix (Percentage) | Weighted-average contribution margin | Necklaces | 17 | 8.65 | 8.35 | 25 | 67.57 | 5.64 | Earrings

$10 per dozen, what is their total contribution each month at current prices? ($19 - 10) * 5,470 = $49,230 [+/- $1,477] Total contribution = Unit Contribution * units sold QUESTION 3: What will be EasyFind's new price if they choose to implement the price

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 CVP Analysis is a method of examining the relationship

costs and volume changes. As the owner of a Snap Fitness franchise, decisions about selling prices, product mix, and maximizing the use of the fitness center depends on CVP. A CVP analysis classifies cost as variable and fixed, and calculates a contribution margin. Relevant information identified in the analysis is the total monthly fixed costs of Snap Fitness, which are $6,000. Monthly fixed operating costs are $4,000 and monthly lease equipment costs are $2,000. The fitness

where the sales revenue equals to the total costs. Normally it is used for a single product company. Activity level Cost (RM) Sales BEP (RM) Total costs BEP(unit) * Contribution chart : This graph is very similar to the break-even chart just that it contains more information such as the contribution area, profit area and loss area. One can easily spot the position of its activity level. Sales Cost (RM) Total costs BEP (RM) Total VC BEP(unit) Activity level * Profit-volume