4. What is a Break-even Point and why do managers calculate it?
Q: Cost accounting logic can lead managers to keep their resources busy all the time, increasing…
A: Cost accounting deals with allocating costs to several cost objects such as products, services, and…
Q: 4. Construct a profit- volume chart, indicating the break-even point. 5. What is the margin of…
A: Profit-volume chart indicates profit or loss expected, at different sale volumes. Margin of safety…
Q: how to compute break even on a business plan?
A: Break even point is basically a point where the total cost is equal to total sales and thus there…
Q: Why do you think the change in the index of labor cost per unit of output is a useful lagging…
A: A lagging indicator is an observable variable whose direction changes after the interest’s target…
Q: Managers often assume a strictly linear relationship between cost and the level of activity.How can…
A: The managers often assume the strictly linear relationship between the cost and the level of…
Q: Discuss the following components of break-even analysis: fixed costs, variable and semi-variable…
A: Break-even point: It is the point at which the contribution margin earned on sales is equal to fixed…
Q: Break-even analysis is of limited use to management because a company cannot survive by just…
A: Breakeven analysis involves comparison of fixed cost, variable cost and sales price to derive the…
Q: Give an example of how a manager can decrease variable costs while increasing fixed costs?
A: Variable Cost: Variable costs are costs which are directly vary with the change in production.…
Q: 17. What are costs that remain the same in total dollar amount as the activity base changes?
A: The costs that remain same in total dollar amount is Both cost per unit and activity base are…
Q: What is turnover? What does it measure? Describe this in your own words. Writing a formula is not a…
A: What is the Turnover Turnover is the Gross sale made by the company. A company may selling the…
Q: 5. Which of the following statements concerning ideal standards is incorrect? a)Ideal standards…
A: Management accounting is one of the branch of accounting in which decisions are being made with the…
Q: What does it mean to use the DuPont model to help explain a decrease in ROI?
A: Introduction: DuPont analysis is done to find out the various drivers that account for the return on…
Q: Which of the following explains why managers compare the budgeted costs to actual costs? a.…
A: Managers measures budgeted expenses at the end of the year and provide an average of the costs that…
Q: (1) Why are leverage points in a system so critical tounderstand? (2) Why should a manager in…
A: Disclaimer: “Since you have asked multiple question, we will solve the first question for you. If…
Q: what is meant by the term break-even point? why should a manager be concerned about the breakeven…
A: Financial statements are statements which states the business activities performed by the company .…
Q: What are accruals? How much control do managers have overaccruals?
A: Accruals: Accruals are the revenues that are earned but not received, and expenses that are incurred…
Q: 12. As a comppany moves further from its break-even point, one would expect the degree of operating…
A: Operating leverage is the relationship between contribution and operating profit. It defines the…
Q: What is the difference between an accounting break-even and a break-even NPV? Which will offer the…
A:
Q: Managers often assume a strictly linear relationship between cost and volume. How can thispractice…
A: Cost: Cost can be defined as the cash and cash equivalent which is incurred against the products…
Q: Products Breakeven Product A Product B
A: Break-even point: The Break-even point is the level of activity where there is no profit or loss…
Q: 1. The most likely strategy to reduce the break-even point would be to a. Increase both the fixed…
A: A Break-even point is a point at which a company is able to cover all its expenses with the present…
Q: In what way can the use of ROI as a performance measure for investment centers lead to bad…
A: ROI: It is a measure on the amount of return on a particular investment with respect to the…
Q: Why should managers worry about product overcosting or undercosting?
A: A product is said to be over costing when it consumes low level of resources but is reported to have…
Q: Discuss the importance of calculating Break-even point for any organization
A: A break-even analysis is an economic tool which is used to determine the cost structure of a company…
Q: What is the company's break-even point,
A: Break-even point is that point where profit or loss of the company is zero which means that the…
Q: Give an example of how a manager can increase variable costs while decreasing fixed costs?
A: Fixed costs refers to those which do not change according to the change in units of productions.…
Q: Give an example how a manager can increase variable cost while decreasing fixed costs
A: Cost behavior: Cost behavior is the relationship between cost and activity and it is relevant to the…
Q: ow do you find the break even point? without knowing the contribution margin per unit
A: Break-even point means the sale condition where no profit no loss incurred. Break-even point is…
Q: (b) Find the break even point. (c) Find the maximum profit. (d) Find the revenue that maximizes…
A: Break-even point is the point at which company neither earns profits nor incurs losses. Break-even…
Q: Why might a manager exhibit a behavioral tendency to inappropriately consider sunk costs in making a…
A: Sunk Costs: Sunk costs are those costs incurred in the past and it cannot be changed unless if any…
Q: •The most likely strategy to reduce the break-even point should be to 1. Increase fixed costs 2.…
A: Note: Since you have posted multiple questions, we will solve the first question for you. To get the…
Q: Give an example how manager can decrease variable cost while increasing fixed cost
A: Cost behavior: Cost behavior is the relationship between cost and activity and it is relevant to the…
Q: Describe the differences in behavior of fixed costs, variable costs, semi-variable costs and step…
A: Fixed costs are fixed in nature, it doesn't vary with the change in units. The total fixed cost will…
Q: way a manager could improve turnover
A: Turnover is a important term used in accounting, taxation and business. The success of the business…
Q: what will be the company's break-even point in units?
A: Break-even point in units is the number of units at which there is no…
Q: What questions should managers answer when considering dropping a product or segment?
A: Drop or Keep Decision: When a product or segment of a business is costing more money than earning,…
Q: break even income
A: Break even income means the income which is equal to expenses, i.e., there is no profit or loss.
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- The International Parcel Service has installed a new radio frequency identification system to help reduce the number of packages that are incorrectly delivered. The capital investment in the system is $65,000, and the projected annual savings are tabled below. The system’s market value at the EOY five is negligible, and the MARR is 18% per year. Solve, a. What is the FW of this investment? b. What is the IRR of the system? c. What is the discounted payback period for this investment?A company planning to market a new model of motor scooter analyzes the effect of changes in the selling price of the motor scooter, the number of units that will be sold, and the cost of making the motor scooter on the estimated net present value (NPV) of the project. They predict that the break-even point for sales price for the motor scooter is $2,480. What does this mean? O If the motor scooter is sold for $2,480, then the project will make a profit. The net present value (NPV) of the project equals to zero at the sale price of the motor scooter equal to $2,480. O At the price of $2,480, the revenue for the scooter will exactly equal its production cost. O The predicted selling price of the motor scooter is $2,480. O The maximum that the motor scooter can sell for and still make the project have a positive net present value (NPV) is $2,480.Your uncle is considering investing in a new company that will produce high quality stereo speakers. The sales price would be set at 1.5 times the variable cost per unit; the variable cost per unit is estimated to be $75.00; and fixed costs are estimated at $1,200,000. What sales volume would be required to break even, i.e., to have EBIT = zero? O 28,880 O 16,000 O none of the above O 30,400 Ⓒ33,600
- MKM International is seeking to purchase a new CNC ma-chine in order to reduce costs. Two alternative machines arein consideration. Machine 1 costs $500,000 but yields a 15 per-cent savings over the current machine used. Machine 2 costs$900,000 but yields a 25 percent savings over the current ma-chine used. In order to meet demand, the following forecastedcost information for the current machine is also provided.a. Based on the NPV of the cash flows for these five years,which machine should MKM International Purchase? As-sume a discount rate of 12 percent.b. If MKM International lowered its required discount rate to8 percent, what machine would it purchase?Year Projected Cost1 1,000,0002 1,350,0003 1,400,0004 1,450,0005 2,550,000ECONOMICS (UPVOTE WILL BE GIVEN. PLEASE WRITE THE COMPLETE SOLUTIONS. NO LONG EXPLANATION NEEDED. BOX THE FINAL ANSWER.) Cartoon Network Courier Services plans to install a new radio frequency identification system that will help reduce the number of packages that are incorrectly delivered. The capital investment for the system is Php 4,120,000, and the projected annual savings are shown in the table below. The system’s market value at the EOY five is negligible, and the MARR is 18% per year. determine the following: a. What is the IRR of the system? Is the new system profitable? b. What is the simple payback period for this investment? c. What is the discounted payback period for this investment?The Miramar Company is going to introduce one of three new products: a Widget, a Hummer, or a Nimnot. The market conditions (favourable, Stable, or unfavourable) will determine the profit or loss the company realizes, as shown In the following payoff table: State of Nature Favourable Stable Unfavourable Product 0.2 0.7 0.1 $ $ $ Widget 120,000 70,000 -30,000 Hummer 60,000 40,000 20,000 Nimnot 35,000 30,000 30,000 Required: 1. Develop the opportunity loss table and compute the expected opportunity loss for each product. 2. Determine how much the firm would be willing to pay to a market research firm to gain better information about future market conditions.
- A computer call center is going to replace all of its incandescent lamps with more energy-efficient fluorescent lighting fixtures. The total energy savings are estimated to be $1,875 per year, and the cost of purchasing and installing the fluorescent fixtures is $4,900. The study period is five years, and terminal market values for the fixtures are negligible. Solve, a. What is the IRR of this investment? b. What is the simple payback period of the investment? c. Is there a conflict in the answers to Parts (a) and (b)?List your assumptions. d. The simple payback “rate of return” is 1/θ. How close does this metric come to matching your answer in Part (a)?Your company is considering delivering their own products instead of relying on 3rd party logistics companies to make deliveries for them. If they invest in a fleet of trucks, they estimate that the initial investment for the vehicles will be $200,000. Annual maintenance and gas costs will be approximately $12,000, annual revenues will be $60,000, and the vehicles will be worth a total of about $20,000 at the end of their life. If you expect the vehicles to last for about 10 years and the company has a MARR of ? 15%, what is the present worth of the project?A computer call center is going to replace all of its incandescent lamps with more energy- efficient fluorescent lighting fixtures. The total energy savings are estimated to be $1,875 per year, and the cost of purchasing and installing the fluorescent fixtures is $4,900. The study period is five years, and terminal market values for the fixtures are negligible. Solve, a. What is the IRR of this investment? b. What is the simple payback period of the investment? c. Is there a conflict in the answers to Parts (a) and (b)?List your assumptions. d. The simple payback "rate of return" is 1/0. How close does this metric come to matching your answer in Part (a)?
- Just because a project’s payback period is relatively long doesn’t mean it is not profitable in the long run. Consider an investment in LED lights with a price tag of $239,000. The estimated annual savings in electricity and routine maintenance is $40,300 and the life of the LED lights is 20 years. Solve, a. What is the simple payback period for the lights? b. What is the IRR of this investment? c. What do you conclude from Part (a) and Part (b)?A company planning to market a new model of motor scooter analyzes the effect of changes in the selling price of the motor scooter, the number of units that will be sold, the cost of making the motor scooter, the effect on Net Working Capital, and the cost of capital for the project. They predict that the break-even point for the sales price for the motor scooter is $2,480. What does this mean? O If the motor scooter is sold for $2,480, then the project will make a profit. O If the motor scooter is sold for $2,480, then the net present value (NPV) for the product will be zero. O The predicted selling price of the motor scooter is $2,480. O The maximum that the motor scooter can sell for and still make the project have a positive net present value (NPV) is $2,480.The management of East Manufacturing needs a new high tech sorting machine and has two different proposals under consideration. They require a rate of return of 10% (discount rate) and the Accounting Department has prepared the following information: Initial Investment Useful Life of Equipment Net Annual Cash Flow Salvage Value Investment B: Click to open:↓ Ⓡ Clearly label and show calculations for full credit! No calculations = No credit. 1) Calculate the Payback Period for each option: Investment A: 2) Calculate the Net Present Value of each option: Investment A: $ 3,700,000 7 years $ 900,000 $0 Investment B: A $3,400,000 7 years $800,000 $90,000 B
