BU385 Midterm 2 Tutors: Dylan Cowley Greg Krikorian Coordinator: Jason Liou Some images used from course and textbook slides. 1 Did you know that… • Your donation DIRECTLY supports an education development project in Latin America? • AND you can go build the project funded THIS SUMMER with us? How to Apply! • www.lauriersos.com: – Visit the ‘Trips’ section to see upcoming opportunities at your school – Click the trip and fill out the online application form. • With questions e-mail outreach@lauriersos.com – If the dates don’t work, e-mail outreach@studentsofferingsupport.ca to see if there is a trip that can work! Interested in an Outreach Trip? • • • • • Come to an information session: Tuesday, November 5th at 10pm …show more content…
– Breakeven, payback period, NPV 20 Breakeven Example Franklin & Bash are looking to calculate the number of cases they will have to take this month to break even. Their fixed costs are $45000, their labour costs are $5/case, research materials cost $2/case and they charge $1000 per case. How many should they take to breakeven? = FC/(R-VC) = $45000/[1000-(5+2)] = 45.32 21 Make or Buy? Oceanic airlines is trying to decide whether they should make or buy their airplanes. They could make them for $500 000 with cost for labour at $20 000 per week. A supplier’s price is $6 700 000 for 10 planes. Cost is then reduced to $7 500 per week. Make or buy? 22 Solution Make: v = 500 000 F = 20 000 Buy: v = 6 700 000/10 = 670 000 F = 7 500 X = point of indifference 500000x + 20 000 = 670000x + 7500 12500 = 170000x X = 0.0735 If demand is variable cost 24 More • Cash flow – (cash received) – (cash outflow for labour, material, etc.) • Present Value – Sum (current value) of all
Free cash flows of the project for next five years can be calculated by adding depreciation values and subtracting changes in working capital from net income. In 2010, there will be a cash outflow of $2.2 million as capital expenditure. In 2011, there will be an additional one time cash outflow of $300,000 as an advertising expense. Using net free cash flow values for next five years and discount rate for discounting, NPV for the project comes out to be $2907, 100. The rate of return at which net present value becomes zero i.e.
Martinez Company’s relevant range of Production is 7,500 to 12,500 units. When it produces and sells 10,000 units, its unit costs are as follows:
Cleanse is an Australian body soap company who produce and wholesale their products out to supermarket chains such as Woolworths and Coles. The company has been operating for over 3 years and has established a head office in Brisbane and Sydney with over 200 employees in its Australian operations. In addition to its Australian operations, Cleanse also has a branch in Delhi, India where they produce the same product and wholesale Cleanse products
Total cost = (F * T/Q) + (H * Q / 2) = (80 * 200,000 / 10,000) + (1.00 * 10,000/2)
3. Promoting transfer readiness and postsecondary enrollment along with further transitory pathways toward relevant employment, apprenticeships or job training.
To find the break-even point for napkins, you use the same formula. The fixed cost is still $420,000.00. The selling price of napkins is $7.00. The variable cost is $4.50. $7.00 minus $4.50 is $2.50. So then you take $420,000.00 and divide it by $2.50 to find the breaking point of $168,000.00. The company will have to sell $168,000.00 to break even in sales. The margin for safety for napkins is -$48,000.00. This is found by subtracting the actual or expected cost of $120,000.00 by the break-even point of $168,000.00. You can cut sales by $48,000.00 and not sustain a loss.
So I wanted to let you know that I found there is an issues with the Premier Wrist Brace HCPCS codes. L3809 is listed on the M & S boxes and this is incorrect. You will also notice in epic there no price for L3809. You will need to change these to the correct code of L3807. All the other sizes (XS, L & XL) have the correct code (L3807) listed. We are working on getting all the boxes with the incorrect code re-stickered, but they are coming from the manufacture this way, so we may not catch them all especially once the clinic re-stocks them.
I’m sure you are aware as of May 1 2017 I will have ten years working for you here at the office.
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
I’m writing this notice of disputes to inform you that I disagree with the proposal of change the construction program in accordance with AS4000 clause 42.1. I found the instruction given was not practical and I cannot agree to follow it. Followed with the original contractual agreement, I have made the prearrangements with the subcontractors for the program to be commenced. The change of the program you instructed will cause cancellation of the prearrangements. It does affect the program progress in the following aspects. It may cost me additional costs for breaking the agreements also impacts on my reputation and relationships with the subcontractors, for which I may submit the written notice of disputes followed with the claim due to the
2. (TCO 1) Which object would you use to retrieve customers who live in Germany and the United States? (Points : 5)
Springfield Express has an opportunity to obtain a new route that would be traveled 20 times per month. The company believes it can sell seats at $ 175 on the route, but the load factor would be only 60 percent. Fixed cost would increase by $ 250,000 per month for additional personnel, additional passenger train cars, maintenance, and so on. Variable cost per passenger would remain at $ 70.
For this study abroad, I could not find the exact requirements for attendance, but the minimum grade point average (GPA) for school activities are ranging from 2.5 to 4.0 GPA scale. The classes or study abroad will not be available if ten or more students are not enrolled. I would also recommend the students’ classification to be a junior or higher because at this point they are older and responsible enough to take their classes seriously and make it an adventurous tour of learning and exploring. The program does recommend a letter
4. Evergreen Fertilizer Company produces fertilizer. The company’s fixed monthly cost is $25,000, and its variable cost per pound of fertilizer is $0.15. Evergreen sells the fertilizer for $0.40 per pound. Determine the monthly break-even volume for the
showed Mrs. Carter the job estimation sheet, it laid out the numbers showing that Lambeth could not do the job for less than $1,625. Right there Lambeth would lose $125 since Mrs. Carter was not willing to pay any more than $1,500, not to mention their $275 profit. If the company would have taken the job for $1,500, instead of $1,900, they would have lost a total of $400.