Commecial Residential Total Number of Customers 200 600 800 Service Revenue $ 32,000 $72,000 $ 104,000 Variable Costs 8320 27,360 35,680 Contribution Margin 23,680 44,640 68,320 Fixed Costs 53,000 Operating Income $ 15,320
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Analyzing profitability analysis, service company
Burlington Internet Services is an Internet service provider for commercial and residential Customers. The company provided the following data for its two types of customers for the month of August:
For each type of customer, determine both the contribution margin per customer and the contribution margin ratio. Round to twos decimal places. Which type of service and more profitable?
![Commecial
Residential
Total
Number of Customers
200
600
800
Service Revenue
$ 32,000
$72,000
$ 104,000
Variable Costs
8320
27,360
35,680
Contribution Margin
23,680
44,640
68,320
Fixed Costs
53,000
Operating Income
$ 15,320](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F839ac639-0f59-4f2f-b15b-0c8de8033131%2Ffba9443a-971e-4866-8f89-58893a0be151%2Fwcmdnma.png&w=3840&q=75)
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- Contribution margin and contribution margin ratio For a recent year, McDonald’s (MCD) company-owned restaurants had the following sales and expenses (in millions): Line Item Description Amount Sales $19,207.8 Food and paper $(2,564.2) Payroll and employee benefits (2,416.4) Occupancy and other expenses (4,357.6) General, selling, and administrative expenses (2,545.6) Total $(11,883.8) Operating income $7,324.0 Assume that the variable costs consist of food and paper, payroll, 25% of occupancy and other expenses, and 40% of the general, selling, and administrative expenses. a. What is McDonald's contribution margin? Round to the nearest tenth of a million (one decimal place). b. What is McDonald's contribution margin ratio? Round to one decimal place. c. How much would operating income increase if same-store sales increased by $800 million for the coming year, with no change in the contribution margin ratio or fixed costs? Round your answer to the nearest tenth…Bed & Bath, a retailing company, has two departments-Hardware and Linens. The company's most recent monthly contribution format income statement follows: Sales Variable expenses Contribution margin Fixed expenses Net operating income (loss) Total $ 4,180,000 1,248,000 2,932,000 2,180,000 $ 752,000 Answer is complete but not entirely correct. $ (52,100) Required: What is the financial advantage (disadvantage) of discontinuing the Linens Department? Financial (disadvantage) Department Hardware $ 3,100,000 830,000 2,270,000 1,380,000 $ 890,000 A study indicates that $378,000 of the fixed expenses being charged to Linens are sunk costs or allocated costs that will continue even if the Linens Department is dropped. In addition, the elimination of the Linens Department will result in a 12% decrease in the sales of the Hardware Department. Linens $ 1,080,000 418,000 662,000 800,000 $ (138,000)Lucido Products markets two computer games: Claimjumper and Makeover. A contribution format income statement for a recent month for the two games appears below: (See attached image for data and question formatting) ONLY NEED QUESTION 3! 3) Prepare a contribution format income statement at the company's break-even point that shows the appropriate levels of sales for the two products.
- Calculate the Return on Investment from the following responsibility report data using total revenue as the base: Account Revenues Clothing revenue Clothing accessories revenue Expenses Associates wages Managers wages Cost of clothing sold Cost of accessories sold Equipment/foxture repairs Responsibility report data Actual $419,769 17,492 $48,641 29,410 262,242 6,372 786 1,575 Utilities Be sure to enter the answer as a percentage but do not include the % sign. Round to two decimal places.Segment Contribution Margin Analysis The operating revenues of the three largest business segments for Time Warner, Inc., for a recent year follow. Each segment includes a number of businesses, examples of which are indicated in parentheses. Turner (cable networks and digital media) Home Box Office (pay television) Warner Bros. (films, television, and videos) Assume that the variable costs as a percent of sales for each segment are as follows: Turner Home Box Office Warner Bros. Revenues Time Warner, Inc. Segment Revenues (in millions) 38% 30% a. Determine the contribution margin and contribution margin ratio for each segment from the information given. When required, round to the nearest whole millionth (for example, round 5,688.7 to 5,689). Round contribution margin ratio to whole percents for each segment from the information given. Variable costs Contribution margin $90,000 93,000 27,000 A 28% Turner Home Box Office Warner Bros. LA 000Most businesses sell several products at varying prices. The products often have different unit variable costs. Thus, the total profit and the breakeven point depend on the proportions in which the products are sold. Sales mix is the relative contribution of sales among various products sold by a firm. Assume that the sales of Jordan Incorporated for a typical year are as follows: Product Units Sold Sales Mix A 18,320 80% B 4,580 20 Total 22,900 100% Assume the following unit selling prices and unit variable costs: Product Selling Price Variable Cost Contribution Margin A $ 90 $ 75 $ 15 B 150 110 40 Fixed costs are $420,000 per year. Assume that the sales mix, expressed in terms of relative physical units sold, is constant as sales volume changes. --Assume the original facts except that now fixed costs are expected to be $42,000 higher than originally planned. How does this expected increase in fixed costs affect the breakeven point in units? How does…
- BE2.12 - Using Excel to Calculate Gross Margin and Revenue PROBLEM Bugsy provided the following operating information during the current year. Operating income Selling, general, and administrative costs Cost of goods sold $ 185,000 42,000 77,500 Student Work Area Required: Provide input into cells shaded in yellow in this template. Input the required mathematical formulas or functions with cell references to the Problem area or work area as indicated. What was Bugsy's gross margin this year? Gross margin What was its total revenue this year? Total revenueAssume you have asked your data folks to determine the relationship between customer service scores (i.e. the ratings provided by customers in response to a survey) and profit. The analyst reports the following: "I gathered data for the last 48 months and ran a regression where profit in a given month is the dependent variable and customer service score in that same month is the independent variable. I found an intercept of $10,000 (p-value: 0.31) and the coefficient on customer service score is $1,200 (p-value: 0.22). The R-2 (which is appropriate when there is just one independent variable) is 0.07." What do you infer from the results (two to three sentences, sticking to the information provided) and why?Annie B's Homemade Ice Cream is an ice cream shop in Asheville, NC. The table shown below contains five measures under the column heading If and five measures under the column heading Then. If Employee turnover percentage Number of new flavors created Average revenue per order Inventory as a percent of sales Average customer order fulfillment time → → → + Then Customer perception of our customer intimacy Customer perception of our product leadership Net operating income Return on assets Percent of customers that strongly agree with the statement "I would readily recommend your company to someone else" Required: 1. For each row in the table, write an if-then hypothesis statement that connects the two measures in a manner that most likely reflects the goals of the company. If the employee turnover percentage If the number of new flavors created If the average revenue per order If the inventory as a percent of sales If the average customer order fulfillment time then the customer…
- Calculate the Return on Investment from the following responsibility report data using total revenue as the base: Responsibility report data Account Actual Revenues Clothing revenue $473,158 Clothing accessories revenue 18,757 Expenses Associates wages $41,704 Managers wages 22,906 Cost of clothing sold 254,631 Cost of accessories sold 5,969 Equipment/fixture repairs 960 Utilities 1,539 Round to two decimal places. Be sure to enter the answer as a percentage but do not include the % sign.Contribution margin and contribution margin ratio For a recent year, McDonald's (MCD) company-owned restaurants had the following sales and expenses (in millions): Sales Food and paper D Payroll and employee benefits Occupancy and other expenses General, selling, and administrative expenses million $19,207.8 $(2,564.2) (2,416.4) (4,357.6) (2,545.6) Operating income Assume that the variable costs consist of food and paper, payroll, 25% of occupancy and other expenses, and 40% of the general, selling, and administrative expenses. a. What is McDonald's contribution margin? Round to the nearest tenth of a million (one decimal place). $(11,883.8) $7,324.0 b. What is McDonald's contribution margin ratio? Round to one decimal place. % million How much would operating income increase if same-store sales lecreased by $800 million for the coming year, with no change in the contribution margin ratio or fixed costs? Re decimal place).In some business models, like restaurants, revenue determines expenses. For example, a restaurant owner may find that labor and food costs should each be 30% of total revenue for the business model to work. As you run your business over time, you'll see certain patterns and limitations (e.g. cafes only have a certain number of seats) -- patterns in revenue to determine expenses. Please review and analyze the Financial Statement Model and explain each component in Dark Blue Such as % Growth per month, Revenue, Expenses, Operating Cash Flow, etc.
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