Gross margin

conditions. Each of these ailments can be controlled by generic medication. Additionally, by advising patients to use generic drugs not only will it save money for the patient but it will also generate a greater profit for CVS. This is because the profit margin of generic medication is higher than that brand-name drugs. Introducing a new application through the Android and Apple market can have a significant improvement on this program. With a majority of the U.S. owning a smartphone, having an…

1) One event from Sigmund Freud’s childhood that shaped his personality theories was when he was scolded by his father for urinating in his parent’s bedroom. His father told him that nothing will become of him and Freud would often have recurring dreams of this with him answering that he has become something in spite of this. This event likely shaped Freud’s view on how big of a role the unconscious part of a person plays in shaping personality and how important dream analysis is. Another…

recurring order, I strongly suggest using the fixed cost structure since the fixed cost are taken care of already regardless of the special order and will only rise if it is out of the relevant production range. This can be seen by the higher contribution margin using the fixed cost structure. I would suggest avoiding the special order under most circumstances if there is no excess capacity because the company would lose $40.59 per burger using the variable structure or $45 if they used the…

1. What are the relevant facts? • Ryan was recently hired as the Chief Accountant for a relatively small firm • Sid, the VP of sales, is concerned that the company will not reach their sales quota (200,000 units) • CEO requires the contribution margin to be $2.00 per unit in order to achieve a pre-tax profit of $85,000 • Due to the variable costs of $4.00 per unit, the selling price must be $6.00 o Competitors are selling similar products o at lower prices • Variable costs must decrease in…

Concepts of CVP (Cost Behaviour Analysis?) Contribution Margin Contribution margin (CM) is a cost accounting concept that allows a company to determine the profitability of individual products (Investopedia, 2015). In short, it is equivalent to the revenue less the total variable cost (Horngren, Datar, & Rajan). The CM per unit measures the amount of each unit sold contributes to cover fixed costs and increasing profit and also considers what happens when sales and production increase by one…

Thomas to provide her with Bridgestone’s annual budgetary income statement in a contribution margin format. She explained that this format is the basic foundation for CVP analysis since it presents revenues and expenses based on their variable or fixed behavior in relation to service activity (namely, volume of services). Sheryl’s understanding of Bridgestone’s operating environment and the contribution margin income statement will enable to provide suggestions regarding how to increase…

Food manufacturing facilities are high profit businesses all over the country. Each region of the country has a specialty; the north has cheese and dairy, the south has fruits, and the center region has meats. Living in the Midwest, the most common food facilities produce, meats, soy and pizza toppings, the best examples are Tyson and Hormel Foods. That is what my business does we manufacture the best kind of food; brownies. Brownies sell all over the country in grocery stores and markets as…

Our new client, the hotel’s owner, was waiting for us as we walked into the lobby for the first time. He appeared tired and frustrated. He said, “Please help me get back my successful hotel.” His 235 unit, full service hotel had had its economic rug pulled out from underneath. This two story property was built on a site selected for its proximity to a large GM manufacturing plant. As a result, our client had enjoyed two decades of profitable RevPAR. Each week a small army of suppliers,…

only the finest tasting cupcakes, with a vanilla cake bottom topped with sugary vanilla frosting with sprinkles. In order to find our breakeven point in units, we need to divide our fixed costs by our unit contribution margin. Our fixed costs are $362 and our unit contribution margin is found by computing: unit selling price – unit variable costs. Our variable costs per unit is $1.24, ($0.91 consists of…

contribution margin per unit, the breakeven points in units and dollars, the calculation of margin of safety and degree of operating leverage, and the assumption on…