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Hi I need questions a, b and c solved with the working. Please make the work as clear as possible with the used formulas. these
Hi I need questions a, b and c solved with the working. Please make the work as clear as possible with the used formulas. these are some pointers that are helpful.
- The main focus is the calculation of the contribution margins for each model. Please follow the format of the charts given in (Exhibit 1) by including headings for each car model as well as a totals column. Also, organize your final income statement to calculate CM. Meaning, Revenue, then VC, then CM, then FC, then a final total Net Profit. It is best to do these calculations via Excel. To complete the CM section, you will need a preliminary calculation to separate VC and FC of Labour and Maintenance. Dont forget to include limitations of your CM analysis we are looking for one relevant limitation, properly explained in a few sentences. There is no need to write long paragraphs.
- BE, MOS, and DOL calculation. For BE, make sure you calculate total units first, and then apply the sales mix percentage (which can also be calculated easily using the units sold information given in Exhibit 1). MOS can be calculated using physical units it does not have to converted to dollars. DOL should be in dollars however. The interpretations for both MOS and DOL should use concepts taught in lecture and in the textbook to relate to the case. Again, relevancy and conciseness is key here.
- Target Profit should be easy once youve completed your first initial income statement (from CM calculations). Just use that current total NI you calculated and increase it by 20% then apply the formula (again, right in your textbook). Only after that can you apply sales mix percentages. There is no need to do anything regarding tax rates.
- Since this case is very objective and calculation heavy, please keep in mind that most of your report should be charts, with only a few small paragraphs for the limitations and interpretations. Again, any written calculations will be penalized. No exceptions.
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