Contribution margin

and combining it with a marketing strategy that focuses on higher margin products, companies are able to continue and increase profits and survive.

Cost behavior is one of the most important aspect which helps in analyzing the nature and responses of different costs. Generally the cost behavior is breakdown of costs into fixed and variable components. The cost behavior is usually analyzed with the help of CVP analysis. The cost behavior patterns are analyzed by cost-volume-profit analysis, including the calculation of a firm 's break-even point in units and sales dollars. There are different costs that respond to the different activities like

and volume changes. As the owner of a Snap Fitness franchise, decisions about selling prices, product mix, and maximizing the use of the fitness center depends on CVP. A CVP analysis classifies cost as variable and fixed, and calculates a contribution margin. Relevant information identified in the analysis is the total monthly fixed costs of Snap Fitness, which are $6,000. Monthly fixed operating costs are $4,000 and monthly lease equipment costs are $2,000. The fitness

For each distribution strategy, calculate the unit contribution and contribution margin rate for each of the two products line (necklaces and pairs of earrings). What is the weighted average contribution margin for an order at a trade show and an order with sale representatives? Trade Show | Sales ($) | Unit VC ($) | Unit Contribution Margin | Product Qty | Sales mix (Percentage) | Weighted-average contribution margin | Necklaces | 17 | 8.65 | 8.35 | 25 | 67.57 | 5.64 | Earrings

Chapter 2 Questions 2-1. I agree with this statement. I would also like to add that cost behavior is also identifying the key resources that are performed, resources used in performing these activities, costs of the resources, and what the cost is driven from. 2-2. Two rules of thumb when analyzing cost behavior are to manage what the company manufactures, sells, and to give advice as to where costs can be reduced. 2-3. Three examples of a variable cost are a 12% increase in the production of

1.Critique the various pros and cons of the variable costing proposal that were presented in the meeting. What arguments would you add? One positive aspect of adopting the variable costing system that was described in the text, is some of the staff members do not seem to understand absorption costing, the current costing method. When using absorption costing, income is affected by sales volume and production volume changes. Variable costing may be more suitable for management who do not have

to be providing the product at a considerably lower price. Taking the above two assumptions, and the rough margin estimate of the manufacturer in the body care industry we come to an estimated value of the Pantene shampoo sachet to be around INR 12. 1.92 The net contribution, (adjusted to the offer) that a single 300ML bottle shall make is therefore Original estimated contribution of 300ML1.9 – Cost of the Pantene shampoo offered free in the advertisement1.91 = INR 42.04 1.93 Costs here shall

1. List and briefly describe the advantages and disadvantages inherent to the food truck business model and as compared to traditional restaurants. Food trucks have exploded into mainstream American cuisine. Once thought of as a cheap meal available at odd times of the night, street food has become a vehicle for chefs on the rise to make their mark on the food industry. Operating a food truck may seem like an easy task, but it can turn out to be a tremendous undertaking and risky financial venture

Product Line: Eau de Parfum initially; to be followed by bath soap and body lotions. Retail Price Point: $40 for 1.7oz. Spray bottle. Variable cost structure similar to other Flare Fragrances. Trade margin: 40% Introductory Deals: 5% and 10% off-invoice allowances on small and large size prepacks, respectively. Sales of each prepack were expected to account of 1/3 of 2009 Savvy sales. Sampling: Production of 1 million 1/8 oz. samples to be distributed

A1. Costing Method Costing Method is an accounting process that assesses itemized input costs of production and fixed costs to determine overall costs of production. (Kucera, n.d.) Competition Bikes is performing this analysis so management can determine the optimum sales units to breakeven from its San Diego plant based on the current sales mix of 9 Titanium bicycles for every 5 CarbonLite bicycles produced. Traditional costing is an easily implemented costing method that aligns with generally