Purpose of Assignment
The Case Study focuses on CVP (Cost-Volume-Profit), break-even, and lip of insurance analyses which allows students to test started through a trade scenario and applying these tools in directorial resolution making.
Cost-Volume-Profit Analysis Grading Guide
Generally Accepted Accounting Principles (GAAP), U.S. Securities and Exchange Commission (SEC)
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Scenario: Mary Willis is the advertising director for Bargain Shoe Store. She is prevalently started on a superior promotional hostilities. Her ideas enclose the installation of a new lighting classification and acceptiond spread-out interinterspace that obtain add $24,000 in agricultural costs to the $270,000 in agricultural costs prevalently departed. In importation, Mary is proposing a 5% cost lessen ($40 to $38) obtain result a 20% acception in sales size (20,000 to 24,000). Variable costs obtain dwell at $24 per span of shoes. Management is meditative delay Mary's ideas but watchful environing the possessions these changes obtain accept on the break-even summit and the lip of insurance.
Complete the following:
Compute the prevalent break-even summit in units, and parallel it to the break-even summit in units if Mary's ideas are used.
Compute the lip of insurance narration for prevalent operations and following Mary's changes are introduced (Round to unswerving ample percent).
Prepare a CVP (Cost-Volume-Profit) pay assertion for prevalent operations and following Mary's changes are introduced.