BUS 202 Lecture 15: March 3rd
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8 Pages
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Department
BUS - Business Administration
Course Code
BUS 202
Professor
Nick Ross

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March 3rd Friday, March 3, 2017 9:16 AM --- Total Per unit Sales 100k 250 Var exp 60k 150 • Cm 40k 100 Fixed 35k N.I. 5k • Q =100,000/250 = 400 • P = $250 • V = 150 • F = 5,000 • Q break even f/p-v • 35K/250-150 = 350 ○ PROFIT = $0 • Target level of profit: ○ How many units do we need to sell to achieve some profit level ○ How many units do you need to sell to buy your new car worth $30,000 ○ Pie = p*q - v*q -f ○ 30,000 = 250*q -150*q-35,000 ○ 65,000=100q ○ Q= 650 ○ Formual: § Q = pie +f / P-v § Rev = pie + f/ cmr • Cost structure: ---- Bogside: Sterling Sales 100,0000 100,000 Var exp 60,000 30,0000 ○ Cm 40,000 70,000 F 30,000 60,000 NI 10,000 10,000 ○ Cmr March 3rd Friday, March 3, 2017 9:16 AM --- Total Per unit Sales 100k 250 Var exp 60k 150 • Cm 40k 100 Fixed 35k N.I. 5k • Q =100,000/250 = 400 • P = $250 • V = 150 • F = 5,000 • Q break even f/p-v • 35K/250-150 = 350 ○ PROFIT = $0 • Target level of profit: ○ How many units do we need to sell to achieve some profit level ○ How many units do you need to sell to buy your new car worth $30,000 ○ Pie = p*q - v*q -f ○ 30,000 = 250*q -150*q-35,000 ○ 65,000=100q ○ Q= 650 ○ Formual: § Q = pie +f / P-v § Rev = pie + f/ cmr • Cost structure: ---- Bogside: Sterling Sales 100,0000 100,000 Var exp 60,000 30,0000 ○ Cm 40,000 70,000 F 30,000 60,000 NI 10,000 10,000 ○ Cmr Var exp 60,000 30,0000 ○ Cm 40,000 70,000 F 30,000 60,000 NI 10,000 10,000 ○ Cmr § Bogside: □ 40/100 = 0.4 § Sterling: □ 70/100=0.7 ○ Variable expense ratio: § Bogside: □ 60/100=0.6 § Sterling: □ 30/100=0.3 ○ Sales increase 10%; ---- Bogside: Sterling Sales 110,0000 110,000 Var exp 66,000 33,0000 § Cm 44,000 77,000 F 30,000 60,000 NI 14,000 17,000 ○ Sales decrease 20% from original: ---- Bogside: Sterling Sales 80,0000 80,000 Var exp 48,000 24,0000 § Cm 32,000 56,000 F 30,000 60,000 NI 2,000 -4,000 ○ What would make you decide Sterling or Bogside § Appetite to risk § Industry □ Affects variability ○ Segmented income statements: § How do we analyze a company with multiple segments § Traceable fixed cost □ A cost attached to a single line of business § Common fixed cost: □ A cost attached t multiple lines of business Var exp 60,000 30,0000 ○ Cm 40,000 70,000 F 30,000 60,000 NI 10,000 10,000 ○ Cmr § Bogside: □ 40/100 = 0.4 § Sterling: □ 70/100=0.7 ○ Variable expense ratio: § Bogside: □ 60/100=0.6 § Sterling: □ 30/100=0.3 ○ Sales increase 10%; ---- Bogside: Sterling Sales 110,0000 110,000 Var exp 66,000 33,0000 § Cm 44,000 77,000 F 30,000 60,000 NI 14,000 17,000 ○ Sales decrease 20% from original: ---- Bogside: Sterling Sales 80,0000 80,000 Var exp 48,000 24,0000 § Cm 32,000 56,000 F 30,000 60,000 NI 2,000 -4,000 ○ What would make you decide Sterling or Bogside § Appetite to risk § Industry □ Affects variability ○ Segmented income statements: § How do we analyze a company with multiple segments § Traceable fixed cost □ A cost attached to a single line of business § Common fixed cost: □ A cost attached t multiple lines of business ○ Segmented income statements: § How do we analyze a company with multiple segments
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