Module 05 Course Project – Final Presentation

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JBlair_CVPandBreak-evenanalysis12022018.xlsx
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Sheet1

variable cost cost per cookie($)
2.45 0.02
0.8 0.01 No indication of type of cost as required
3.52 0.03
1.29 0.01
1.29 0.01
3.58 0.03
4.92 0.04
0.05 0
0.05 0
0.05 0
18
HP: total variable cost		 0.15
Question 2: HIGH-LOW COST ANALYSIS
month kilowatt hours used cost($)
january 1866 230 To find variable cost of the electricity, Variable cost per hour =y2-y1/x2-x1 where y2 is the highest cost and X2 is its corresponding kilowatt hours while Y1 is the lowest cost and X1 is its kilowatts used. variable cost
february 1439 202 y2 $230 102.9517241379
march 1146 197 y1 $182 79.3931034483
april 1046 190 x2 1866 OK 63.2275862069
may 996 182 x1 996 57.7103448276
june 1760 225 y2-y1 $48 54.9517241379
x2-x1 870 97.1034482759
Variable cost per unit 0.0551724138
HP: variable cost per unit of the electricity		 455.3379310345
HP: the total variable cost of the electricity
Total fixed cost =$230- variable cost of this activity, TFC=$230-(1866* variable cost per unit)
variable cost for 1866 102.9517241379
Total fixed cost $127.05
HP: this is the fixed cost for the electricity
question four: Daily contribution margin income
The following are the assumptions before developing daily contribution margin income, we assume that the 120 cookies are produces, fixed cost is 40% of the variable cost, each cookie is sold at $0.5 each and the administrative and selling expenses are equal to zero.
revenue variable cost fixed cost total cost operating income contribution margin contribution margin ratio contribution margin%
60 18 7.2 25.2 34.8
HP: operating income= revenue- total cost		 42
HP: contribution margin is the opeariong income plus fixed cost
HP: variable cost per unit of the electricity
HP: total variable cost
HP: this is the fixed cost for the electricity		 0.7 70
question five: break-even analysis
To break-even, TR=TC, where the total cost is $25.2( fixed cost+ variable cost). Given that cost per cookie is $0.5, and TR=P*Q, the break-even will be, 0.5q=25.2, which give Q as 50. Therefore, the number of cookies needed to break-even per day are 50.
The break-even sales dollars each day= break-even sales*price of each cookie. This means , 50*0.5= $25.
To earn daily profit of $100, by using the following formula 100=0.5q-(7.2+0.15q), by solving for q, the Q appears to be 265 cookies.This is not realistic becauese we aonly produce 120 cookies thus we cannot sell what is not available.
Cost per cookie is not $.50. You stated the selling price was $.50. Ths makes your calculation inacccurate

Sheet2

high-low analysis units cost($)
January 1866 230
February 1439 202
March 1146 197
April 1046 190
May 996 182
June 1760 225

Sheet3

Sheet4