+1-415-670-9189
info@expertsmind.com
Determine contribution margin
Course:- Finance Basics
Reference No.:- EM1349823




Assignment Help
Expertsmind Rated 4.9 / 5 based on 47215 reviews.
Review Site
Assignment Help >> Finance Basics

Use the formula stated: Contribution Margin = Revenue - Variable Costs
(CM = R - VC)

Your top two Agents ... Let's call them ... Agent J and Agent K, both bring in two "must do deals" with new extraterrestrial ah ... accounts.

Agent J's is for $ 100,000 ... 50 units at sales price $2,000 per unit
Agent K's is for $ 50,000 ... 20 units at sales price $2,500 per unit

At first pass ... Agent J's looks to be the better proposal!

After all $100,000 is MORE than $ 50,000 right? And MORE is always better?

Variable cost is $1,900 per unit.
Yet when you run the numbers, using a Contribution Margin Statement, Agent
K's proposal is now the better deal ...

How can that be? What could be done to Agent J's proposal to make it better?

 




Put your comment
 
Minimize


Ask Question & Get Answers from Experts
Browse some more (Finance Basics) Materials
Compensating innocent victims of high-risk drivers is problematic for society. An automobile insurance plan (assigned risk plan) is one approach to the problem of providing
What is the likely impact of a highly inflationary economy on a firm's ability to pay dividends? Would you expect this impact to be greater or smaller for a rapidly expandin
ZeeBancorp is planning the establishment of a contract collection service subsidiary that would provide collection services to small and medium-size companies.
Institutional investor is the combination of people, organization, and group with significant money to invest in different investment opportunities available in market. It c
A share of stock is currently selling for $31.80. If the anticipated constant growth rate for dividends is 6% and investors are seeking a 16% return, what is the dividend ju
Using a week (7 days) as a base period, round the orders to nearest power of 2. If you charge the fixed trucking fee only once for deliveries that coincide what is the annua
Mutual fund's net asset is $50, but the amount charges, but the amount charges an exit fee of one percent of net asset value and a load fee of 4 percent of net asset value.
Property A sold 22 months ago for $98,500; it sold last week for $108,000. Property B sold 20 months ago for $105,000; it sold two weeks ago for $113,500. What is the averag