Application of cost-volume-profit relationships, Mechanical Engineering

Application of Cost-Volume-Profit Relationships:

Quality stores open for 10 hours a day. Company is considering decreasing the store hours through one hour. This shall result in a loss of 400 liters of sales per month and would cut fixed costs by Rs. 10,000 per month. Should the company change its store hours?

Analysis

Decrease in revenue = 400 × 50 = Rs. 20,000 per month

Reduction in fixed cost = Rs. 10,000 per month

Loss of contribution margin = 20,000 × 0.255 = Rs. 5100 per month

Increase in net monthly income per store = 10,000 - 5,100 = Rs. 4900

Above performed analysis mention that by following the aforementioned policy of decreasing the store hours by one hour each day shall result in a profit of Rs. 4900. Therefore the policy is beneficial to the company.

Posted Date: 1/31/2013 6:05:09 AM | Location : United States







Related Discussions:- Application of cost-volume-profit relationships, Assignment Help, Ask Question on Application of cost-volume-profit relationships, Get Answer, Expert's Help, Application of cost-volume-profit relationships Discussions

Write discussion on Application of cost-volume-profit relationships
Your posts are moderated
Related Questions
Battery Inspection :  A fully charged and properly maintained battery is essential for proper lighting and starting of the motorcycle. STEPS Remove the right side cov

A pelton wheel works at the foot of a dam because of which the head available at the nozzle is 220m. the nozzle diameter is 20 c.m. and coefficient of speed 0.98. The wheel operate

how I can do with matlab to solve problems by this theorm

WHAT IS PARITY CHECK ?

Q. Explain Rate Pressure Product? The systolic blood pressure is multiplied by the heart rate to provide the double product or modified fusion time index. On presence of an obs

Manifolds The surface of a solid must satisfy some conditions so that the resulting solid is well-behaved. This is the so-called manifold condition. While recent research has s

what is properties , uses and process ?

Q. What is Passive Fire Protection? Passive fire protection is defined as any fire protection system that, by its nature, plays an inactive role in protecting personnel and pro

Types of Registration Provisional Registration Certificate ( PRC ) This is given for the pre-operative period and enables the units to obtain the term loans and worki

Ratio of belt tension: For Open belt drive:   Angle of contact (θ) for larger pulley = ∏ + 2α Angle of contact (θ) for smaller pulley = ∏ - 2α For cross belt drive: