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Essay heading: Contribution margin
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| Issue: |
Business |
| Written by: |
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| Date added: |
June 14, 1998 |
| Level: |
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| Grade: |
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| No of pages / words: |
2 / 497 |
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0 times |
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The cost involved both variable and fixed would lower your revenue. The new model contribution per unit is lower than Model LX3 and would take away from that models demand and thus reduce revenues. I think this product needs more time in order to lower the variable costs. These must be lowered before it makes sense financially to release the product... displayed 300 characters
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I think this product needs more time in order to lower the variable costs. These must be lowered before it makes sense financially to release the product.
8. a.) Prepare a pro forma statement:
Sales 25,000,000
Cost of goods sold 12,500,000
Gross margin 12,500,000
Marketing expenses
Sales expenses 1,250,000
Advertising expenses 400,000
Freight expenses 2,000,000 3,650,000
General and administrative expenses
Administrative salaries 3,250,000
Administrative commissions 3,750,000
Manufacturing overhead 600,000
Administrative overhead 300,000 7,900,000
Net profit before (income) tax 950,000
b... displayed next 300 characters
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