Reference no: EM131146268
Assignment: Analyzing Profitability and Other Variables
Cost-volume-profit analysis is an extension of break-even analysis. CVP analysis enables managers to understand cost behavior and the effect on profits in response to a wide variety of influences, such as changes in volume, variable and fixed costs, and price. This helps management make appropriate business decisions. For example, CVP analysis helps management identify a break-even point if volume or costs change or determine the volume necessary for a targeted profit level. CVP analysis can also help management develop a pricing strategy by projecting the effects the different price structures will have on costs and profits.
In this assignment, you will examine how you can use CVP analysis to plan and make various business decisions. In addition, you will analyze financial data of Compnet's potential product acquisition (Prime Component) and determine the effects on profit due to variations in its costs and sales price.
Tasks:
Part I: Using CVP Analysis for Business Decisions
Respond to the following:
How will you use CVP analysis to make business decisions at your workplace? Support your answer with examples.
Using an example from your workplace, distinguish between variable and fixed cost structures. Why might different managers assess the same cost differently?
How would you use CVP analysis to develop a budget? Elaborate using examples.
How can the sales department use the CVP tool when analyzing customer profitability?
Write your initial response in a minimum of 500 words. Apply APA standards to citation of sources.
Part II: Performing CVP Analysis
Continuing with the same scenario as in previous assignments for Compnet, complete the following:
Select the links that follow to download and review the files containing the financial data of the product line.
Compnet Balance Sheet Income Statement
Compnet Budget Template
Recalculate the break-even point on the basis of the following what-if scenarios:
Variable costs increase by 5 percent.
The sales price decreases by 10 percent due to an increase in competition.
Click here to access the CVP template and use it to perform your calculations.
Create a 4-6 page paper that includes the above calculations and analyzes the decision options.
Create a one-page memo for your senior management that summarizes your findings and provides recommendations.
Submission Details:
Create 5-7-page document in Microsoft Word that includes both the memo and the paper.
Review standard office memo templates available on the internet and create the one-page memo in Microsoft Word considering the audience to whom this information needs to be presented.
Apply APA standards to citation of sources.
|
What are sustainable growth rates for your subject company
: What are the sustainable growth rates for your subject company over the period that you studied - How do they compare with the actual growth rates that the company experienced over the period studied?
|
|
Outcome of an investigation regarding allegations
: As an outcome of an investigation regarding allegations that Fred Staid and a couple other men in the delivery section had been harassing a coworker, Tamiko Timid, Joe instituted corrective action and counseled the men regarding appropriate behaviors..
|
|
Find the value of the maximum amplitude
: Also find the value of the maximum amplitude.
|
|
Provide an argument for why each method should be used
: Describe your selected ethical dilemma and why it is a dilemma. Provide an argument for two methods of resolving the issue and justify the ethical resolution process you would take under each method. Provide an argument for why each method should b..
|
|
How would you use cvp analysis to develop a budget
: How would you use CVP analysis to develop a budget? Elaborate using examples. How can the sales department use the CVP tool when analyzing customer profitability?
|
|
Discuss the general concept of co-morbidity
: Explain the unique way the two symptom sets interact using the co-morbid pair you chose. Describe how researchers demonstrate co-morbidity among disorders. Discuss the ramifications of co-morbid disorders compared to a single diagnosis.
|
|
Firms increase profits by either lowering cost of production
: Firms can increase profits by either lowering the cost of production or increasing the value of their product (and charging a higher price). In order to do the latter, firms must differentiate their product in some way so that consumers value it more..
|
|
Impact of branding on sales and organizational development
: Topic: Impact of branding on sales and organizational development. This Assignment has three parts: Business project plan and Literature Review, Methodology and Ethics
|
|
Develop a role-play for a commitment hearing
: Develop a role-play for a commitment hearing that illustrates the consequences of not following the selection process. Make sure a team member represents the psychologist, the client advocate, and other roles as necessary.
|