Case 4 33 cost structure target profit and break even analysis

Product, positioning and packaginginnovation will be the key for companies to attract this new consumer.

Explain four fundamental management processes that help organizations attain their goals. The reason for this application is to separate the Variable and Fixed costs associated in selling telecommunications equipment to derive pertinent data needed to determine break even sales. Total variable and fixed costs are compared with sales revenue in order to determine the level of sales volume, sales value or production at which the business makes neither a profit nor a loss the "break-even point". All rights reserved. In financial analysis ,the objective is to determine in manufacturing number of products that must be sold ata given price to cover the costs ,or in project financing number of months or years required by forecasted total net cash flow to equal estimated total project cost. An increasing number of organizations are segregating managerial accountants in separate managerial-accounting departments. The Contribution Margin is significant in determining Break-even point whether by the number of units to break Variable Cost As the owners of a new business, our ultimate goal is to make a profit. Define managerial accounting and describe its role in the management process. The restructuring of each Income Statement may be found in Appendix A of this report.

The different type of cost behaviour is often represented graphically with the increasing level of activity or output being measured on the horizontal axis and the increase in cost being measured on the Words: - Pages: 2 Break Even Analysis This will be accomplished by using the data provided below for this LASA case study.

The Contribution Margin is significant in determining Break-even point whether by the number of units to break A third and final constraint of the analysis is that it oversimplifies business. This will be accomplished by using the data provided below for this LASA case study.

Negative Considerations: 1- The center has been staffed at the bare minimum, so any increase in the number of patient visits would require immediate administrative and medical staffing increases. Although IT clearly plays an important role in accounting Efendi et al. Avoidable Cost —CM: This allows you to determine your operating profit after the fixed costs are applied. Profit can be measured in many ways and there are many complex techniques that can be used to calculate how much of a product or service must be sold to produce a profit. One such franchise is Snap fitness out of Minnesota and knowing the fixed cost of operating the franchise we can determine how many members are needed to break even. As the benefits of growth trickle down, an increasing number of people are moving up from the economically weaker class to join the middle class. The different type of cost behaviour is often represented graphically with the increasing level of activity or output being measured on the horizontal axis and the increase in cost being measured on the Some ancillaries, including electronic and print components, may not be available to customers outside the United States.

OB represents the total fixed costs in the business. The first and main constraint is that it is just a prediction based upon what could happen in the future with the business.

case 5 33 cost structure break even and target profit analysis

Beyond this point every additional unit sold will result in increasing profit for the business. Each franchise provides various information pieces about their franchise to attract new owners.

When someone is looking to invest in a franchise, doing your own analysis to validate the information provided by the franchise is critical in understanding whether or not the franchise is going to be as profitable as you would like.

case 3-33 cost structure; break-even and target profit analysis
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Target Profit and Break Even Analysis; Case ; Managerial Accounting