HA THANH - ASSIGNMENT accounting - ACCOUNTING FOR BUSINESS DECISION MAKING Name TRAN THI HA THANH ID No CGS00017332 Class MBAOUM0314C K13A Professor Dr

HA THANH - ASSIGNMENT accounting - ACCOUNTING FOR BUSINESS...

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ACCOUNTING FOR BUSINESS DECISION MAKING 1 Name: TRAN THI HA THANH ID No: CGS00017332 Class: MBAOUM0314C – K13A Professor: Dr. Bich Pham
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TASK 1 1. Present Proposal Amount Unit Percentage Amount Unit Percentage Sales (40,000 units) $800,000 20 100% $800 ,000 20 100% Less variable expenses $560,000 14 70% $320,00 0 8 40% Contribution margin $240,000 6 30% $480 ,000 12 60% Less fixed expense $192,000 $432 ,000 Net operating income 48,000 $ 48, 000 $ As variable expense be reduced by 6 USD per unit, the price per unit after in case the new equipment is purchased: 14$ - 6$ = 8$. 2. a) Degree of operating leverage: For present: ??? = ???????????? ?????? / ????????? ?????? = $240,000/ $48,000 = 5 For proposed: ??? = ???????????? ?????? / ????????? ?????? = $480,000/ $48,000 = 10 b) Break-even point in dollars: For present: ??? = ????? ????? / ?? ????? = $192,000/ 0.3 = $640,000 For proposed: ??? = ????? ????? / ?? ????? = $432,000/ 0.6 = $720,000 c) Margin of safety in dollars : For present: 2
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10% 4. 3
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Present Proposal Amount Unit Percentage Amount Unit Percentage Sales (40,000 units) $800,000 20 100% $1,200 ,000 20 100% Less variable expenses $560,000 14 70% $900 ,000 8 40% Contribution margin $240,000 6 30% $300,000 25% Less fixed expense $192,000 240, 000 Net operating income $48,000 $60 ,000
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