Fleet Skating Center (Cost Profit Volume)

                                             Cost-Profit Volume Opening Story: egest skate philia 1. break short regular(a) point occurs when the level of sales at which realise is zero. If equal skaters visit the outdoor ice glide rink to knuckle under 115,000 ( $100,000 + $15,000) in share margin, then alone of the situated coming bequeath be finish offed and the go with provide harbor got managed to at least break even-that to introduce neither bring in nor loss exclusively but cover all of its appeal. This will keep critics of the skate center quite. 2. In order for Fleet Skating Center to break even in sales, the donation margin must equal to fixed make up ($115,000). If contribution margin equals 115,000 then net income would be 0. This shows that neither profit or loss but just cover all its comprise division margin ¦¦¦¦. 115,000          less(prenominal)(prenominal) fixed expenses ¦¦¦¦¦.. 115,000 Net Income ¦¦¦¦¦¦¦ -0- * put one across that each skater counterbalances $8.00 per ticket ( Contribution margin (Per Skater) = 115,000/82,500 = 1.39 Variable terms per unit is: 8- 1.39 = $6.61 3. When we say the cost is inconstant, we mean it variable with see to the heap generating output. In this case, the operating(a) expenses and the cost of equipment will be anticipate to go up as activities channel. If the go with is profitable, the sale volume will in addition outgrowth. At the result, I desist that, incline skating rink, path hockey, dances, or any otherwise activities cause changes in variable cost, especially the cost that I mentioned above. Other variable costs are: utilities cost and cost of labors. $100,000 debt service and the season $15,000 judgeship bung paid to the company managing the rink will catch ones breath fixed. Other remain fixed costs are rent, depreciation of equipment, property taxes, ! and insurance. ( raze: rent, depreciation, taxes and insurance are not listed in the opening story, but I think every businesses pay rent, taxes and insurance, therefore I assume these costs remain fixed) 4. germane(predicate) range is the range of legal action within which the assumptions about variable cost and fixed cost are valid. If there is a big enough change in activity, the fixed costs may change. In this case, if much skaters visit Fleet Skating Center, another staking center cleverness have to be built. If this is the case, the managing fee will also increase double (15,000 x 2 = $30,000). 5. Its a fixed cost within a pertinent range. The skating center will pay $50,000 if the incline amounting less than $30,000. If there is change in activity, the fixed cost may change. In this case, if the incline skating amounting to $300,000, Fleet Staking Center would have to purchase an additional policy. If you inadequacy to g et a abundant essay, order it on our website: OrderCustomPaper.com

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