Lebo_&amp;_Co_Presentation

# Lebo_&amp;_Co_Presentation - Lebo& Co AEM 323 Budget...

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Unformatted text preview: Lebo & Co. AEM 323 Budget Project I ntroduction • Lebo & Co. is a bracelet manufacturer that that distributes to retail outlets. • The company has recently experienced problems with cash flows and cash shortages so they have implemetned a new budget planning process in order to analyze sales, net income, inventories, and overall health of the company. • A master budget is prepared for the 3-month period ending June 30. Sales • Return on Sales: \$1,700,000/(- \$31,868) = \$ -53.345 • Return on Equity: (-\$31,868)/\$133,132 =-.024 • There is peak sales in the months of April and May, which most of the company’s profits are made. I n other periods, the fixed costs exceed net sales resulting in a deficit of net income. • Unit sales for the quarter continue to decrease throughout the quarter falling over 100% from April to June. Net I ncome • Contribution Margin: \$850,000 • Contribution Margin Ratio: \$850,000/\$1,700,000 = .5 • BEP = Fixed Expenses/CM Ratio = \$876,000/5 = \$1,752,000 sales revenue...
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## This note was uploaded on 02/24/2009 for the course AEM 323 taught by Professor As during the Spring '09 term at Cornell.

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Lebo_&amp;_Co_Presentation - Lebo& Co AEM 323 Budget...

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