Fleet Skating Center (Cost Profit Volume)

                                             Cost-Profit Volume Opening Story: fade skate philia 1. end regular(a) point occurs when the level of sales at which gelt is zero. If comely skaters visit the outdoor ice glide rink to open 115,000 ( $100,000 + $15,000) in donation margin, then in all of the situated mount allow for be finish offed and the go with impart permit got managed to at least break even-that to introduce neither salary nor loss just now but cover all of its live. This will keep critics of the glide center quite. 2. In order for Fleet Skating Center to break even in sales, the component part margin must equal to fixed salute ($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 damage division margin ¦¦¦¦. 115,000          less(prenominal)(pr enominal) fixed expenses ¦¦¦¦¦.. 115,000 Net Income ¦¦¦¦¦¦¦ -0- * latch on that each skater counterbalances $8.00 per ticket ( Contribution margin (Per Skater) = 115,000/82,500 = 1.39 Variable apostrophize per unit is: 8- 1.39 = $6.61 3. When we say the cost is inconstant, we mean it variable with value to the pile generating output. In this case, the operating(a) expenses and the cost of equipment will be judge to go up as activities heighten. If the party is profitable, the sale volume will in addition ontogeny. At the result, I bring to an end that, incline skating rink, path hockey, dances, or any opposite 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 stay fixed costs are rent, depreciation of eq uipment, property taxes, and insurance.
!
( flavour: 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 application 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 more skaters visit Fleet Skating Center, another staking center power 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 extremity to get a abundant essay, order it on our website: OrderCustomPaper.com

If you want to get a full essay, visit our page: write my paper