Case ID: 104039

Solution ID: 24680

Words: 1276

Price $ 75

Break-even point analysis: implementation of expected alterations in accounting review.

· Calculations for Question 2 (a)

· Calculations for Question 2 (b)

· Calculations for Question 2 (c)

· Calculations for Question 2 (d)

· Change in Product Structure

· Break Even Point (Units)

· Break Even Point (Sales)

· Variable Cost to Sales

· Unit Contribution to Sales

· Utilization of Capacity

· Investment the company can afford

· Total Number of Units Produced

· Sale Price

· Sales Revenue

· Variable Cost

· Total Variable Cost

· Contribution

· Fixed Costs

· Investment the company can afford

1. What are the assumptions implicit in Bill French’s determination of the company’s break-even point?

2. On the basis of French’s revised information, what does next year look like:

3. What is the break-even point?

4. What level of operations must be achieved to pay the extra dividend, ignoring union demands?

5. What level of operations must be achieved to meet the union demands, ignoring bonus-dividends?

6. What level of operations must be achieved to meet both dividend and expected union requirements?

7. Can the break-even analysis help the company decide whether to alter the existing product emphasis? What can the company afford to invest for additional C capacity?

8. Is this type of analysis of any value? How can it be used?