Analysis of Cost-Volume-Profit
Order ID: 89JHGSJE83839 Style: APA/MLA/Harvard/Chicago Pages: 5-10 Instructions:
Question Description
The Assignment’s Goal
The Case Study focuses on CVP (Cost-Volume-Profit), break-even, and margin of safety analyses, giving students the opportunity to go through a business scenario and apply these techniques to managerial decision-making.
Resources U.S. Securities and Exchange Commission’s Generally Accepted Accounting Principles (GAAP) (SEC)
The Microsoft Office website has tutorial support for Excel and Word features.
There are also extra tutorials available for Office products on the internet.
Scenario
Bargain Shoe Store’s advertising manager is Mary Willis. She’s now working on a large-scale marketing campaign. Her suggestions include installing a new lighting system and increasing display space, which will add $24,000 to the current $270,000 in fixed costs. Furthermore, Mary proposes that a 5% price reduction ($40 to $38) will result in a 20% increase in sales volume (20,000 to 24,000). The variable cost per pair of shoes will stay at $24. Mary’s suggestions are well received by management, but they are concerned about the impact these modifications will have on the break-even point and the margin of safety.
Complete the following steps to complete the assignment:
Calculate your present break-even point in units and compare it to the break-even point in units if Mary’s suggestions are implemented.
Calculate the margin of safety ratio for current operations as well as after Mary’s improvements have been implemented (Round to nearest full percent).
Create a CVP (Cost-Volume-Profit) income statement for present operations as well as following Mary’s improvements.
Write an informal message to management of no more than 700 words addressing Mary’s suggested modifications.
Discuss if Mary’s suggestions should be implemented. Why do you think that is?
Analyze the information listed above (three bullet points) and use it to back up your suggestion.
Use Microsoft Word or Excel to present your work.
Use Microsoft Word or Excel to complete the calculations
RUBRIC
Excellent Quality
95-100%
Introduction 45-41 points
The background and significance of the problem and a clear statement of the research purpose is provided. The search history is mentioned.
Literature Support
91-84 points
The background and significance of the problem and a clear statement of the research purpose is provided. The search history is mentioned.
Methodology
58-53 points
Content is well-organized with headings for each slide and bulleted lists to group related material as needed. Use of font, color, graphics, effects, etc. to enhance readability and presentation content is excellent. Length requirements of 10 slides/pages or less is met.
Average Score
50-85%
40-38 points
More depth/detail for the background and significance is needed, or the research detail is not clear. No search history information is provided.
83-76 points
Review of relevant theoretical literature is evident, but there is little integration of studies into concepts related to problem. Review is partially focused and organized. Supporting and opposing research are included. Summary of information presented is included. Conclusion may not contain a biblical integration.
52-49 points
Content is somewhat organized, but no structure is apparent. The use of font, color, graphics, effects, etc. is occasionally detracting to the presentation content. Length requirements may not be met.
Poor Quality
0-45%
37-1 points
The background and/or significance are missing. No search history information is provided.
75-1 points
Review of relevant theoretical literature is evident, but there is no integration of studies into concepts related to problem. Review is partially focused and organized. Supporting and opposing research are not included in the summary of information presented. Conclusion does not contain a biblical integration.
48-1 points
There is no clear or logical organizational structure. No logical sequence is apparent. The use of font, color, graphics, effects etc. is often detracting to the presentation content. Length requirements may not be met
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