CASE STUDY - Goats: The Green Alternative A QUESTIONS: Clearly indicate the answer to each of the
Question:
CASE STUDY - Goats: The Green Alternative A
QUESTIONS:
Clearly indicate the answer to each of the questions and show how you arrived at your answer:
1. What incremental revenues will McCoy receive if he accepts the proposal?
2. What incremental costs will McCoy incur if he accepts the proposal?
3. Using number of days as the cost driver, prepare a table that describes the costs
identified as either fixed or variable and if variable, the rate/day.
4. Compute the contribution margin per day for the current proposal.
5. Compute the numbers of days needed for McCoy to breakeven for the current
proposal.
6. If you were McCoy, would you go ahead with the current proposal? Why or why not?
What other factors would you consider beyond those calculated in questions 1 to 5?