Tingting Zhao
ACCT 307
Professor Miller
March 01, 2017
Business Memorandum
The purpose of this memo is to summarize a company needs a good decision to make more profit. We use Cost-Volume-Profit analysis to analyze how change in costs and volume affect a company’s operating income and net income. The assignment is about Carlisle Engine Company which manufactures and sells diesel engines for use in small farming equipment. In 2014 budget, selling price is $4,000, variable cost per engine $1,000, annual fixed costs is $4,800,000, net income is 1,200,000, and income tax rate 20%. The first quarter income statement reported that sales is not perfect as expect. The first quarter of 2014, only 400 units had been sold at price of $4,000. Hence, the
ACCT 307
Professor Miller
March 01, 2017
Business Memorandum
The purpose of this memo is to summarize a company needs a good decision to make more profit. We use Cost-Volume-Profit analysis to analyze how change in costs and volume affect a company’s operating income and net income. The assignment is about Carlisle Engine Company which manufactures and sells diesel engines for use in small farming equipment. In 2014 budget, selling price is $4,000, variable cost per engine $1,000, annual fixed costs is $4,800,000, net income is 1,200,000, and income tax rate 20%. The first quarter income statement reported that sales is not perfect as expect. The first quarter of 2014, only 400 units had been sold at price of $4,000. Hence, the