* Ele assumiu que há apenas um ponto de equilíbrio para a empresa ( pela média dos 3 produtos)
* Ele também assumiu que o mix de vendas permanecerá constante
* Ele também assumiu que o mix de vendas permanecerá constante . A receita total e as despesas totais se comportam de forma linear ao longo do intervalo relevante
* Uma vez que a capacidade está sendo expandida para aumentar a produção de Produto C , pode -se supor que este aumento deverá ser atribuído a este produto. Produção de Produto A está a ser reduzida, mas o seu nível de custos fixos tem sido assumido ...view middle of the document...
b. What level of operations must be achieved to meet the union demands, ignoring bonus dividends?
* FC + Union Demands/CMR
* 1st: Union Demands = (6,750,000 x10%) = 675,000
* 2,970,000 + 675,000/.375
c. What level of operations must be achieved to meet both dividends and expected union requirements?
* FC + Target Dividend + Union Demands/CMR
* 2,970,000 + 450,000 + 675,000/.375
3. Can the break-even analysis help the company decide whether to alter the existing product emphasis? What can the company afford to invest for additional “C” capacity?
The break-even analysis can help the company decide whether to alter the existing product emphasis because it will allow the company to identify which product generates the highest...
French, a staff accountant who was hired six months was well aware of his capabilities and took advantage of every opportunity that arose to try to educate those around him. Then, he was requested permission to make a presentation of some break-even data.
The Duo-Products Corporation had not been making use of this type of analysis in its planning or review procedures. What French had done was to determine the level at which the company must operate in order to break even.
He uses information given in past accounting records to construct his break even analysis without take into consideration with other department about the company operation.
As per Bill French:
“The company must be able at least to sell a sufficient volume of goods so that it will cover all the variable costs of producing and selling the goods. Further, it will not make a profit unless it covers the fixed cost as well. The level of operation at which total costs are just covered is the break-even volume. This should be the lower limit in all our planning.”
What are the assumptions implicit in Bill French’s determination of his company’s break-even point?
1. There was only one break-even point for the firm whether product by product or in total (he taking average of 3 products). Refer to the table below.
| A | B | C | Aggregate |
Sales at full capacity (units) | | | | 2,000,000 |
Sales Volume (units) | 600 000 | 400 000 | 500 000 | 1 500 000 |
Unit Sales Price | $10 | $9 | $2.4 | $7.2 |
| | | | |
Sales revenue |...