COMM 305 Chapter Notes - Chapter 11: Earnings Before Interest And Taxes, Eurovision Song Contest, Contribution Margin

• School: Concordia University
• Department: Commerce
• Course: COMM 305
• Professor: Ibrahim Aly

Document Summary

Review 11-16 (a) controllable margin: ,000 (,000 + ,000) = ,000. Roi: ,000 ,000 = 27. 78% (b) (1) (i) controllable margin ,000, same as in (a). (ii) roi: ,000 (,000 ,000) = 31. 25% (2) cm: (,000 ,000) ,000 = 40% Therefore increase of ,000 in sales = ,000 in cm (i) controllable margin: ,000 (,000 + ,000 + ,000) = ,000 (ii) roi: (,000 + ,000) ,000 = 36. 67% For the month ended july 31, 2012 costs (b) In case (a) the performance for the month was satisfactory, although management might want to find out the reason why depreciation has doubled, as this may be an error usually large capital purchases are planned well in advance. Roi = ,000 ,000,000 = 4% (b) 1. Contribution margin is ,000,000 ,400,000 = ,000. Contribution margin percentage is 20%, or (,000 . Increase in controllable margin = ,000 20% = ,000. Roi = (,000 + ,000) ,000,000 = 5. 2%