Description
analysis of Bill Frenchman, case in Management Accounting course
KeyWords: Sensitivity Analysis, Margin of Safety, Variable Cost
Avg Volume Selling Price / Unit Variable Cost / Unit Contribution Total Contribution Volume Selling Price Variable Cost / Unit Contribution / Unit Total Contribution 1,800,000 $1.168 $0.566 $0.602
A 400000 $1.670 $1.250 $0.420
B 450000 $1.500 $0.625 $0.875
$1,084,250 $168,000.00 $393,750.00
Fixed Costs Previous Additonal per month Break Even Volume
Fixed Costs Previous Additonal per month Break Even Volume Capacity at BE
640000 520000 10000 1,062,486 53.12% Avg A 400000 $1.670 $1.250 $0.420 B 450000 $1.500 $0.625 $0.875
For extra dividend Volume Selling Price Variable Cost / Unit Contribution Total Contribution
1,800,000 $1.168 $0.566 $0.602
$1,084,250 $168,000.00 $393,750.00 $1,084,250 640000 520000 10000 $444,250 $200,000 $50,000 $25,000 $25,000 $100,000 1,394,513 69.73%
Fixed Costs Previous Additonal per month Profit Total Dividends Dividends Retained Tax Break Even Volume Capacity
For Union demands Volume Selling Price Variable Cost / Unit Contribution
Avg 1,800,000 $1.168 $0.623 $0.546
A 400000 $1.670 $1.375 $0.295
B 450000 $1.500 $0.688 $0.813
Total Contribution
$982,375 $118,000.00 $365,625.00 $982,375 640000 520000 10000 $342,375 $150,000 $50,000 $25,000 $75,000 1,447,513 72.38%
Fixed Costs Previous Additonal per month Profit Total Dividends Retained Tax Break Even Volume Capacity
For both Extra Div and Union Volume Selling Price Variable Cost / Unit Contribution Total Contribution
Avg 1,800,000 $1.168 $0.623 $0.546
A 400000 $1.670 $1.375 $0.295
B 450000 $1.500 $0.688 $0.813
$982,375 $118,000.00 $365,625.00 $982,375 640000 520000 10000 $342,375 $200,000 $50,000 $25,000 $25,000 $100,000 1,539,128 76.96%
Fixed Costs Previous Additonal per month Profit Total Dividends Dividends Retained Tax Break Even Volume Capacity
C 950000 $0.800 $0.250 $0.550 $522,500.00
C 950000 $0.800 $0.250 $0.550 $522,500.00
C 950000 $0.800 $0.275 $0.525
$498,750.00
C 950000 $0.800 $0.275 $0.525 $498,750.00
Aggregate Volume Selling Price Variable Cost / Unit Contribution / Unit Total Contribution 1,800,000 $1.168 $0.566 $0.602 $1,084,250
A 400000 $1.670 $1.250 $0.420
B 450000 $1.500 $0.625 $0.875
$168,000.00 $393,750.00
Fixed Costs Previous Additonal per month Break Even Volume Capacity Margin of Safety For extra dividend Volume Selling Price Variable Cost / Unit Contribution Total Contribution
640000 520000 10000 1,062,486 53.12% 444,250 Aggregate 1,800,000 $1.168 $0.566 $0.602 $1,084,250 $1,084,250 640000 520000 10000 $444,250 $200,000 $50,000 $25,000 $25,000 $100,000 1,394,513 69.73% 244,250 Aggregate A 400000 $1.670 $1.375 $0.295 B 450000 $1.500 $0.688 $0.813 A 400000 $1.670 $1.250 $0.420 B 450000 $1.500 $0.625 $0.875
$168,000.00 $393,750.00
Fixed Costs Previous Additonal per month Profit Total Dividends Dividends Retained Tax Level of Operations Capacity Margin of Safety For Union demands Volume Selling Price Variable Cost / Unit Contribution
1,800,000 $1.168 $0.623 $0.546
Total Contribution
$982,375 $982,375 640000 520000 10000 $342,375 $150,000 $50,000 $25,000 $75,000 1,447,513 72.38% 192,375 Aggregate
$118,000.00 $365,625.00
Fixed Costs Previous Additonal per month Profit Total Dividends Retained Tax Level of Operations Capacity Margin of Safety For both Volume Selling Price Variable Cost / Unit Contribution Total Contribution
A 400000 $1.670 $1.375 $0.295
B 450000 $1.500 $0.688 $0.813
1,800,000 $1.168 $0.623 $0.546 $982,375 $982,375 640000 520000 10000 $342,375 $200,000 $50,000 $25,000 $25,000 $100,000 1,172,668 1,539,128 76.96% 342,375
$118,000.00 $365,625.00
Fixed Costs Previous Additonal per month Profit Total Dividends Dividends Retained Tax Break even Level of Operations Capacity Margin of safety
For additonal C capacity $342,375
0.651482377
Additonal C Capacity =
C 950000 $0.800 $0.250 $0.550 $522,500.00
C 950000 $0.800 $0.250 $0.550 $522,500.00
C 950000 $0.800 $0.275 $0.525
$498,750.00
C 950000 $0.800 $0.275 $0.525 $498,750.00
For both Volume Selling Price Variable Cost / Unit Contribution Total Contribution
Aggregate 1,200,000 $1.323 $0.779 $0.544 $653,000 $653,000 640000 520000 10000 $13,000 $200,000 $50,000 $25,000 $25,000 $100,000 1,543,645 77.18% -187,000
A 400000 $1.670 $1.375 $0.295 $118,000.00
Fixed Costs Previous Additonal per month Profit Total Dividends Dividends Retained Tax Break Even Volume Capacity Margin of safety
For additonal C capacity -$187,000
Additonal C Capacity =
B 400000 $1.500 $0.688 $0.813
C 400000 $0.800 $0.275 $0.525 x y z 400000 400000 400000 0 0 0 1200000 1800000
$325,000.00 $210,000.00
For both Volume Selling Price Variable Cost / Unit Contribution Total Contribution
Aggregate 1,800,000 $1.168 $0.623 $0.546 $982,375 $982,375 640000 520000 10000 $342,375 $200,000 $50,000 $25,000 $25,000 $100,000
A 400000 $1.670 $1.375 $0.295
B 450000 $1.500 $0.688 $0.813
$118,000.00 $365,625.00
Fixed Costs Previous Additonal per month Profit Total Dividends Dividends Retained Tax Break Even Volume Capacity
For additonal C capacity $142,375
2500000 2000000 Dollars 1500000 1000000 500000
1,539,128 76.96%
C 950000 $0.800 $0.275 $0.525 200,000 $498,750.00
Capacity A 10 20 30 40 50 60 70 80 90 100
B 44,444 88,889 133,333 177,778 222,222 266,667 311,111 355,556 400,000 444,444 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 450,000 500,000
C 105,556 211,111 316,667 422,222 527,778 633,333 738,889 844,444 950,000 1,055,556
Sales 233666.7 467333.3 701000 934666.7 1168333 1402000 1635667 1869333 2103000 2336667
Break - Even Chart
2500000 2000000 1500000 1000000 500000 0 10 20 30 40 50 60 70 80 90 100 Capacity
Fixed Cost Sales Total Cost
Variable Cost FC TC 124513.9 640000 764513.9 249027.8 640000 889027.8 373541.7 640000 1013542 498055.6 640000 1138056 622569.4 640000 1262569 747083.3 640000 1387083 871597.2 640000 1511597 996111.1 640000 1636111 1120625 640000 1760625 1245139 640000 1885139
doc_293625738.xls
analysis of Bill Frenchman, case in Management Accounting course
KeyWords: Sensitivity Analysis, Margin of Safety, Variable Cost
Avg Volume Selling Price / Unit Variable Cost / Unit Contribution Total Contribution Volume Selling Price Variable Cost / Unit Contribution / Unit Total Contribution 1,800,000 $1.168 $0.566 $0.602
A 400000 $1.670 $1.250 $0.420
B 450000 $1.500 $0.625 $0.875
$1,084,250 $168,000.00 $393,750.00
Fixed Costs Previous Additonal per month Break Even Volume
Fixed Costs Previous Additonal per month Break Even Volume Capacity at BE
640000 520000 10000 1,062,486 53.12% Avg A 400000 $1.670 $1.250 $0.420 B 450000 $1.500 $0.625 $0.875
For extra dividend Volume Selling Price Variable Cost / Unit Contribution Total Contribution
1,800,000 $1.168 $0.566 $0.602
$1,084,250 $168,000.00 $393,750.00 $1,084,250 640000 520000 10000 $444,250 $200,000 $50,000 $25,000 $25,000 $100,000 1,394,513 69.73%
Fixed Costs Previous Additonal per month Profit Total Dividends Dividends Retained Tax Break Even Volume Capacity
For Union demands Volume Selling Price Variable Cost / Unit Contribution
Avg 1,800,000 $1.168 $0.623 $0.546
A 400000 $1.670 $1.375 $0.295
B 450000 $1.500 $0.688 $0.813
Total Contribution
$982,375 $118,000.00 $365,625.00 $982,375 640000 520000 10000 $342,375 $150,000 $50,000 $25,000 $75,000 1,447,513 72.38%
Fixed Costs Previous Additonal per month Profit Total Dividends Retained Tax Break Even Volume Capacity
For both Extra Div and Union Volume Selling Price Variable Cost / Unit Contribution Total Contribution
Avg 1,800,000 $1.168 $0.623 $0.546
A 400000 $1.670 $1.375 $0.295
B 450000 $1.500 $0.688 $0.813
$982,375 $118,000.00 $365,625.00 $982,375 640000 520000 10000 $342,375 $200,000 $50,000 $25,000 $25,000 $100,000 1,539,128 76.96%
Fixed Costs Previous Additonal per month Profit Total Dividends Dividends Retained Tax Break Even Volume Capacity
C 950000 $0.800 $0.250 $0.550 $522,500.00
C 950000 $0.800 $0.250 $0.550 $522,500.00
C 950000 $0.800 $0.275 $0.525
$498,750.00
C 950000 $0.800 $0.275 $0.525 $498,750.00
Aggregate Volume Selling Price Variable Cost / Unit Contribution / Unit Total Contribution 1,800,000 $1.168 $0.566 $0.602 $1,084,250
A 400000 $1.670 $1.250 $0.420
B 450000 $1.500 $0.625 $0.875
$168,000.00 $393,750.00
Fixed Costs Previous Additonal per month Break Even Volume Capacity Margin of Safety For extra dividend Volume Selling Price Variable Cost / Unit Contribution Total Contribution
640000 520000 10000 1,062,486 53.12% 444,250 Aggregate 1,800,000 $1.168 $0.566 $0.602 $1,084,250 $1,084,250 640000 520000 10000 $444,250 $200,000 $50,000 $25,000 $25,000 $100,000 1,394,513 69.73% 244,250 Aggregate A 400000 $1.670 $1.375 $0.295 B 450000 $1.500 $0.688 $0.813 A 400000 $1.670 $1.250 $0.420 B 450000 $1.500 $0.625 $0.875
$168,000.00 $393,750.00
Fixed Costs Previous Additonal per month Profit Total Dividends Dividends Retained Tax Level of Operations Capacity Margin of Safety For Union demands Volume Selling Price Variable Cost / Unit Contribution
1,800,000 $1.168 $0.623 $0.546
Total Contribution
$982,375 $982,375 640000 520000 10000 $342,375 $150,000 $50,000 $25,000 $75,000 1,447,513 72.38% 192,375 Aggregate
$118,000.00 $365,625.00
Fixed Costs Previous Additonal per month Profit Total Dividends Retained Tax Level of Operations Capacity Margin of Safety For both Volume Selling Price Variable Cost / Unit Contribution Total Contribution
A 400000 $1.670 $1.375 $0.295
B 450000 $1.500 $0.688 $0.813
1,800,000 $1.168 $0.623 $0.546 $982,375 $982,375 640000 520000 10000 $342,375 $200,000 $50,000 $25,000 $25,000 $100,000 1,172,668 1,539,128 76.96% 342,375
$118,000.00 $365,625.00
Fixed Costs Previous Additonal per month Profit Total Dividends Dividends Retained Tax Break even Level of Operations Capacity Margin of safety
For additonal C capacity $342,375
0.651482377
Additonal C Capacity =
C 950000 $0.800 $0.250 $0.550 $522,500.00
C 950000 $0.800 $0.250 $0.550 $522,500.00
C 950000 $0.800 $0.275 $0.525
$498,750.00
C 950000 $0.800 $0.275 $0.525 $498,750.00
For both Volume Selling Price Variable Cost / Unit Contribution Total Contribution
Aggregate 1,200,000 $1.323 $0.779 $0.544 $653,000 $653,000 640000 520000 10000 $13,000 $200,000 $50,000 $25,000 $25,000 $100,000 1,543,645 77.18% -187,000
A 400000 $1.670 $1.375 $0.295 $118,000.00
Fixed Costs Previous Additonal per month Profit Total Dividends Dividends Retained Tax Break Even Volume Capacity Margin of safety
For additonal C capacity -$187,000
Additonal C Capacity =
B 400000 $1.500 $0.688 $0.813
C 400000 $0.800 $0.275 $0.525 x y z 400000 400000 400000 0 0 0 1200000 1800000
$325,000.00 $210,000.00
For both Volume Selling Price Variable Cost / Unit Contribution Total Contribution
Aggregate 1,800,000 $1.168 $0.623 $0.546 $982,375 $982,375 640000 520000 10000 $342,375 $200,000 $50,000 $25,000 $25,000 $100,000
A 400000 $1.670 $1.375 $0.295
B 450000 $1.500 $0.688 $0.813
$118,000.00 $365,625.00
Fixed Costs Previous Additonal per month Profit Total Dividends Dividends Retained Tax Break Even Volume Capacity
For additonal C capacity $142,375
2500000 2000000 Dollars 1500000 1000000 500000
1,539,128 76.96%
C 950000 $0.800 $0.275 $0.525 200,000 $498,750.00
Capacity A 10 20 30 40 50 60 70 80 90 100
B 44,444 88,889 133,333 177,778 222,222 266,667 311,111 355,556 400,000 444,444 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 450,000 500,000
C 105,556 211,111 316,667 422,222 527,778 633,333 738,889 844,444 950,000 1,055,556
Sales 233666.7 467333.3 701000 934666.7 1168333 1402000 1635667 1869333 2103000 2336667
Break - Even Chart
2500000 2000000 1500000 1000000 500000 0 10 20 30 40 50 60 70 80 90 100 Capacity
Fixed Cost Sales Total Cost
Variable Cost FC TC 124513.9 640000 764513.9 249027.8 640000 889027.8 373541.7 640000 1013542 498055.6 640000 1138056 622569.4 640000 1262569 747083.3 640000 1387083 871597.2 640000 1511597 996111.1 640000 1636111 1120625 640000 1760625 1245139 640000 1885139
doc_293625738.xls