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Break even analysis and target profit, taxes - Patterson Parkas Company's sales revenue is $30 per unit, variable costs are $19.50 per unit, and fixed costs are $147,000.a)Compute Patterson's contribution margin per unit and contribution margin ratio.b)Determine the number of units Patterson must sell to break even.c)Determine the sales revenue required to earn (pretax) income equal to 20% of revenue.d)How many units must Patterson sell to generate an after-tax profit of $109,200 if the tax rate is 35%?e)Patterson is considering increasing its advertising expenses by $38,500. How much of an increase in sales units is necessary from expanded advertising to justify this expenditure (generate an incremental contribution margin of $38,500)?
Battle of the Sexes game To understand Battle of the Sexes game, let’s consider a story as follows: Two players (a couple) wish to go to an event together but disagree about
Determine Cost pool and Cost drivers Cost pool: it is another name given to a cost centre and, therefore an activity cost centre may also be termed as an activity cost pool.
How can we draw a break even chart Under this method the variable cost line is drawn first and then fixed cost line is drawn over and parallel to the variable cost line. The fi
Competition oriented pricing policy Most companies fix the price of their products after a careful consideration of the competitor's price structure. Deliberate policy may be f
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what does it mean by improving materials usage in an organization?
Major features of JIT (1) Elimination of non-value added activity: JIT manufacturing can be described as a philosophy of management, dedicate to the elimination of waste. Wa
Capital gearing ratio The term capital gearing is used to describe the relation ship between equity share capital including reserves and surplus to preference share capital a
interest rates
Viti Ltd, located in southern Viti Levu, manufactures a variety of industrial valves and pipe fittings that are sold to customers in the eastern states. Currently, the company is o
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