Competition Bikes Inc. Storyline Essay Example for Free

Competition Bikes Inc. Storyline Essay To: Vice President The following is a summary report to recommend whether Competition Bikes should change its traditional costing method to activity based costing, and an analysis of the breakeven point with regards to sales units and dollars for both CarbonLite and Titanium bikes. It also discusses the impacts to the breakeven point. The cost-volume-profit evaluation and the traditional vs activity based costing method overhead analysis were used for the review and analysis. Traditional Based Costing vs Activity Based Costing Traditional Based Costing Method (TBC). TBC uses one rate, the overall cost of production, to estimate costs based on the revenue production created. Unlike ABC, manufacturing costs in TBC are only assigned to sold merchandises and do not account for nonmanufacturing costs such as administrative costs. This method is general not as accurate as ABC as it does not account for costs specifics to the level of products. For Competition Bikes, the company can see its manufacturing overhead is $239,020 for the Titanium bikes, and $232,380 for the CarbonLite bikes for a total of $471,400 in overhead costs. This means the unit cost for each is $713 for Titanium bikes, and $1359 for the CarbonLite bikes. Activity Based Costing Method (ABC). ABC determines and allocates cost by activities a company executes. This generally happens in four steps: identify each activity and its associated costs, both total and indirect; estimated cost driver and quantity; allocation computation; and cost allocation to the respective activity. ABC refines the way indirect costs are allocated to production and focuses on the costs of each individual activity. Costs are also further assigned to each product within the activities and each activity has its own cost driver. Because of the  specificity, active based costing provides a more accurate picture of the true costs. Direct material (DM), and direct labor (DL) are the same for each bike in using TBC or ABC. However, in using ABC, the company can break out the manufacturing overhead into factory setups, quality control, engineering services, product movements, utilities and services, and depreciation. The total for each bike using the ABC method is $590,715 for Titanium bikes, and $729,985 for CarbonLite bikes. Although the total is still the same $471,400 in overhead costs, the ABC method allows Competition Bikes to see that the Titanium bikes depreciate much faster than the CarbonLite and that it takes more utilities and services to make those bikes. Factory setups and quality control are much higher for CarbonLite bikes than those for Titanium ones. Per unit, the Titanium Bikes cost $656 each and the CarbonLite bikes cost $1460. Recommendation. It is recommended to use ABC to determine true costs associated with activities and products. This will give the company more knowledge of its finances and spending and in return by seeing a clearer picture of costs, make better decisions on funding and budget, and gain cost savings. Activity based management in Competition Bikes can use ABC to make decisions that increase profits while still meeting customer needs. Understanding where costs are going will help Competition Bikes to remove unnecessary costs and set fair price for the products. Overpricing products causes a lost in market sharing while underpricing products diminishes revenue. Better prices for consumers means more business for the company. With activity based costing, Competition Bikes will be able to determine the optimum sales units required with the sales mix of 9 Titanium bicycles produced for every 5 CarbonLite bicycles that will produce the bikes at San Diego at breakeven. The company will also be able to reevaluate activities on a regular basis to reduce future costs as well. Evaluating activities and setting sales prices are part of value engineering. Currently the company thinks it costs $1359 to make a CarbonLite bike and have set the selling price accordingly. In reality, the bikes cost $1460 to make. With a $101 difference, the company may want to adjust their selling price in future months. Using ABC also allows the company to use the Just in Time (JIT) system. This system allows ensures materials are purchased just in time to produce the products, and products are completed just in time for delivery. JIT uses the demand-pull system to receive the order, schedule production, delivered materials, and finished product delivered to the customer. This lessens the amount of excess parts and inventory saving the company money as well. Breakeven Point This analysis will evaluate the breakeven point for Competition Bikes Inc. Sales units and sales dollars will be identified for the breakeven point. These sales units and dollars will be broken down between CarbonLite and Titanium bikes. The breakeven point is used my companies to prevent loss. The Cost Volume Profit (CVP) is the tool in which to capture the breakeven point. Sometimes it is referred to as the breakeven analysis. The CVP assists the company in identifying future operation need, production costs, and expansion possibilities based on estimating costs, prices, and volumes. This profit response can help Competition Bikes determine the amount of needed sales, what products to manufacture, pricing policies, marketing strategies, and how much profit is actually needed. In this analysis we will assume that the fixed and variable costs remain constant, and that the number of units produced equals the number of units the company sells. CVP is defined by the equation Total Revenues – Total Costs = Profit. The breakeven point is the point in which the CVP equals zero or, Revenues – Expenses = 0. Meaning, the revenues cover all the costs, fixed and variable. Therefore, the CVP can be further broken down into Total Revenue – Total Fixed Costs – Total Variable Costs = Total Profit. The contribution margin is then identified by Total Revenue – Total Variable Costs (leaving out the fixed costs). Contribution Margin is important to identify the differences in each product’s profits. For Competition Bikes, the contribution margin for the Titanium bikes is $900-$679=$221. The  CarbonLite Bikes yield $1495-$1384=$111 each. Using the 450 Titanium bikes and 250 CarbonLite bikes sold, the total combined contribution margin for Competition Bikes is $127,000. That’s broken down like this: Titanium Bikes contribution margin of $221 per unit, 450 units equals $221*450, or $99,450. CarbonLite bikes contribution margin of $111 per unit, 250 units equals $27,750. Contribution margins $99,450 + $27,750 = $127,200 Total Contribution Margin. To determine the profits in more detail, we use the equation (Selling Price (per unit) * Quantity Sold) – (Variable Costs (per unit) * Quantity Sold) – Fixed Expenses = Breakeven Point (Zero). The fixed costs are the units sold * the weighted average contribution margin. The weighted average contribution margin is used to find the breakeven point and is essentially the average of contribution margin amounts per unit. The equation is Total Contribution Margin / Total Quantity Sold. For Competition Bikes, our combined weighted average contribution is $181.71. That’s $127,200/ 700 units sold (450 Titanium and 250 CarbonLite bikes) = $181.71. To establish the breakeven point, we also need to know the combined revenue and costs as well. So we calculate total revenue as the following. Titanium bikes are $900 each and 400 units sold, equals $405,000. The CarbonLite bikes are $1495 each and 250 sold which equals $373,750. Combine the $405,000 + $373,750 = $778,750 Total Combined Revenue. The variable costs for each are Titanium bikes: $679 in costs, 450 sold, which equals $305,550 or $679*450 = $305,550. CarbonLite bikes: $1384 in costs, 250 sold, which equals $346,000, or $1384*250= $346,000. The two together, $305,550 + $346,000 = $651,550 Total Combined Variable Costs. The total combined margin can also be calculated by taking $778,750 subtracting the $651,550 and it equals the same $127,200 Total Combined Margin we calculated earlier. We use this as a check and balance system here. To determine the breakeven units, we look at the fixed costs and weighted average contribution margin discussed earlier. The fixed cost for the company is $400,000. Divided by the weighted average contribution margin  181.71, we get the breakeven units for the product sales mix of 2201. The contribution margin ratio is the percentage of contribution margin to revenue. To find the contribution margin ratio, we divide the total combined margin by the total revenue. This tells us by how much the price per unit exceeds the variable cost per unit. In this scenario, Total Combined Margin $127,000 divided by Total Revenue $778,750 which is .163, or $127,000 / $778,750 = .163 Contribution Margin Ratio. Since the bikes are not equal, we must calculate a product mix in addition to the weighted average. Using the weighted average, we can calculate the breakeven point in a proportionate way using sales units and sales dollars. For sales units, we take the breakeven units for the product sales mix and multiply it by the ratio of units sold divided by the total number of unit sold. So for Titanium, the sales units at the breakeven point is [450 / 700] * 2201, or 1415 units. For CarbonLite, [250 / 700] * 2201 = 786 units. To calculate the sales dollars, we multiply the sales units by the sales price. In this instance, Titanium is 1415 units multiplied by $900 cost for each unit or, 1415 * $900 = $1,276,500. CarbonLite is 786 units multiplied by $1495 price for each unit, or 786 * $1495 = $1,175,070. The combined total sales dollars is $2,451,570 To break even, the profit must be zero. Gains and losses are equal. For Competition Bikes, the breakeven point is 1415, or $1,276,500 in Titanium bikes, and 786 CarbonLite bikes, or $1,175,070. Impacts of the Breakeven Point A2b. Based on an evaluation of cost-volume-profit, Prepare a summary report that describes the impacts to the breakeven point if company management needed to increase the cost of direct materials by 10% cost increase and needed to add $50,000 in fixed costs to the production facility. Company management has asked for a report on the impacts of increasing the  cost of direct materials by 10% and fixed costs by $50,000 in relation to the breakeven point. The contribution margin and weighted average are based in part on direct materials, or variable costs. Raising the costs by 10% is significant and will have a great impact on the company. Total Revenue is $778,750 and variable costs now $681,800. This increase is broken down by variable cost per unit to $709 for Titanium bikes, and $1551 for CarbonLite. The Contribution Margin per unit is now 191 and 44 respectively lowering the total combined contribution margin to $96,950. CarbonLite bikes contribution margin decreased from $111 to $44 per unit, over a 60% decrease. Calculated by dividing the Total Combined Contribution Margin $96,950 by the Total Units of 700, the 138.50 weighted average contribution margin per unit also dropped by 24% from 181.71. This shows how significant a 10% can be to the contribution margin. Ten percent in one area can mean much larger impact in other areas. With an increase in fixed costs to $450,000 that now brings the breakeven units for the product sales mix to 3249. We calculate this by $450,000 fixed costs divided by the lower weighed average contribution margin 138.50. This continues to affect numbers as we calculate sales units and sales dollars. Titanium bikes sales units are 450 units divided by 700 total units, multiplied by the weighted average 3249 for 2089 units. CarbonLite bike sales units are 250 units divided by the 700 total units, multiplied by the weighted average 3249, totaling 1160 sales. Sales dollars are calculated as Titanium bikes 2089 units * $900 = $1,880,100 and CarbonLite bikes as 1160 units * $1495 = $1,734,200 for a total $3,614,300. The breakeven point is now increased. Sales for Titanium bikes is now up to 2089 units, or $1,880,100 and CarbonLite bikes up to 1160 units, or $1,734,200. By raising direct costs 10% and fixed costs 13%, Competition Bikes now has to sell 674 more Titanium bikes, and 374 CarbonLite bikes to break even. That’s a 48% increase. Based on this analysis, it would be in Competition Bikes best interest to try to keep costs low. Variable and fixed costs show that a small increase can significantly impact the company’s breakeven point. Variable costs have a higher impact than fixed costs. Direct costs per unit should be specifically addressed in reducing costs as well as increasing sales.

Michael Jackson Essay -- essays research papers fc

Michael Jackson: Man In The Mirror   Ã‚  Ã‚  Ã‚  Ã‚  Michael Jackson is arguably the most well know celebrity figure in the world today. Michael Joseph Jackson was born in August 1958, in Gary, Indiana. Jackson has spent almost his entire life as a public performer. He was a member of the Jackson Five at the age of four, soon becoming the group's lead vocalist and front man. Onstage, he modeled his dance moves and vocal styling on James Brown, and portrayed an absolute self-confidence on stage that belied his shy, private personality. Throughout his life the media has dissected his personality and projected his image on a worldwide screen. The progression of his image has been a fascinating phenomenon, and his current taboo image is still looked at through the eyes of the media microscope. Jason Cowley says, â€Å"his face is no longer a face but a canvas on which is etched an image of endlessly elusive self-perfection.   Ã‚  Ã‚  Ã‚  Ã‚  One of the most notable characteristics of Michael Jackson is his appearance. It seems, as his appearance changes, so too does his image. Being one of the most photographed and news worthy celebrities has a great impact on his image and his chameleon-like appearance. After Jackson emerged, in the Seventies, from the largely successful pop group The Jackson Five, he became a talented solo superstar. His first solo album, Off The Wall was a complete success. Then he was a young, handsome fresh-face with an Afro. He was a sex symbol to the ladies and perhaps the best dancer in the world of pop music at that time. The warning signs of a fast changing image and appearance were slowly emerging through the smoke. Jackson began speaking in various interviews about his admiration for the beauty of singing sensation and diva Diana Ross. He reportedly desired to look like her (Brown, 54). When he re-emerged in the Eighties with the smash album Thriller, the most successful i n pop history, his appearance had changed significantly. His nose was more sculpted, his cheekbones were higher and his lips thinner. No one could deny the fact that Michael had plastic surgery after the release of the video for the number one single â€Å"Billy Jean.† He looked more attractive, and there was a new, strutting sexual energy about him. He would never look so good again (Saunders, 3).   Ã‚  Ã‚  Ã‚  Ã‚  Michael Jackson’s ima... ...rtist. Lusted said, â€Å"The sexual and racial ambiguity of his image can be seen as pointing to a range of questions about images of sex and race in popular culture and popular music. If we regard his face, not as the manifestation of personality traits but as a surface of artistic and social inscription, the ambiguities of Jackson’s image call into question received ideas about what black male performers in popular music should look like.† There is one thing we know for certain about the real Michael Jackson, he is an extraordinarily talented man with a gift for creating music that people all over the world. He has a love for helping children, and is involved in many charities. His musical talent, more than anything though, accounts for more than his twenty years of stardom.   Ã‚  Ã‚  Ã‚  Ã‚   Works Cited Goldberg, M. Michael Jackson: The Making of the â€Å"King Of Pop†, Rolling Stone, 1/9/92 Issue 621, p.32. Lusted, D. The Glut of the Personality, Stardom: Industry of Desire. Routledge: New York, 1991 Johnson, R. â€Å"The Michael Jackson Nobody Knows,† Ebony, December 1984 Saunders, F. â€Å"The Man In The Mirror,† New Statesman, 1/29/2001, Volume 130 Issue 4522.

Personal Life and Success Essay

At what point do you stop when you have achieved successfulness? This is a million dollar question that has pondered through the minds of humans for ages. Success is perceived differently in every individual. But what opinion is correct? What is the perfect formula for a successful life? Does success consist of the amount of money you earn or power or is success based on happiness? To achieve ultimate success, is contentment vital? These are the questions that make the word â€Å"success† so subjective. What is the correct definition of success? In the dictionary it states that it is the accomplishment of an aim or purpose. Depending on your personal purpose in life, success is achieved at different levels. Everyone has a different purpose in life that they would like to achieve. Thus, who determines what success means is based on their goals in life. Money or popularity may be someone’s purpose so they would define that as success. On the contrary, does living your life everyday with no regrets or not worrying about money make you a successful person? When do we know when to stop when success is finally achieved? Do you stop working for success when you have all the money in the world or do you stop when you are comfortable with your lifestyle? Particular people believe success is when you are content with the life you live, not worrying about money or the everyday struggles of life. Others may conclude success is based on your income or how nice of an automobile you drive. It depends what you view as a satisfied lifestyle. Unfortunately our society revolves and relies on money. Though that sounds contradicting, money plays a great role in everyone’s lives. In order to support a family and own a house, currency is vital. We live in a society where money controls all. Without a decent job and a steady income, happiness seems so distant in the modern American life. We believe getting an education and earning a salary will bring happiness and joy. I am not saying money is the key to success but it’s a foundation in our modern society. My father is a great example of how success is viewed differently in each person. He was a man who never went to college but was determine to be successful. He worked hard since he was in high school and now works for Boat and Motors Superstore where he manages his own boat parts department. My father loves working with boats and loves his family. If you were to ask him, his life has been successful. My father measures success with how much joy is brought to his life on a regular basis. A secure job and a loving family fulfill his goal which ultimately makes him a successful person in his eyes. He does not focus on whether he has a higher income than others, my father’s man concern is security and happiness of himself and his family which is a quality that I cherish as well. The way I interpret success may be unique but I believe joyfulness will be present. My perspective of being successful resembles my father’s goals in life. I may not be wealthy or famous by any means but if I can maintain a stable job and a healthy family I would consider myself the most successful person in the world. Since the word success is more of an opinion based definition, the only way to measure success is if you are happy with the purpose you set in life that you would love to achieve. In other words, if you are happy with the person and life that is bestowed upon you today, then you have found success. What is success is a question from the past and will continue to be the question of the future. I believe there will never be one accepted answer. If that answer is ever found, please feel free to inform me. But when looking back on your life that you lived, ask yourself if you were happy. If you were, I honestly believe you will feel successful. I think success does not always mean happiness, but happiness always means success. I may be erroneous towards the classification of the word success, but an opinion is neither right nor wrong. I hope one day we can call ourselves successful and find out if happiness trails along with it.

Fetal Alcohol Spectrum Disorder ( Fasd ) - 1603 Words

Fetal Alcohol Spectrum Disorder â€Å"Fetal Alcohol Spectrum Disorder (FASD) is an umbrella term describing the range of effects that can occur in an individual whose mother drank alcohol during pregnancy. These effects may include physical, mental, behavioral, and/or learning disabilities with possible lifelong implications† (HHS, 2005). FASD refers to conditions such as: fetal alcohol syndrome including partial FAS, fetal alcohol effects (FAE), alcohol related neurodevelopment disorder, alcohol-related birth defects. The conditions that are involved with FASD can range from mild to severe and it is not likely that two people share the exact same symptoms. FAS is defined as a medical diagnosis involving four key features: alcohol exposure, growth deficiently, certain facial features, and brain damage. Infants who have been exposed to prenatal alcohol rarely show all symptoms of the medical condition FAS. Other terms have been used to describe the implication involved with FAS. Frequently used terms are: Partial Fetal Alcohol Syndrome, Alcohol-related Neurodevelopmental Disorder and Alcohol-related Birth Defects. A child with Partial Fetal Alcohol syndrome exhibits only some of the physical signs of FAS and will likely have both learning and behavioral difficulties. A child suffering from Alcohol-related Neurodevelopmental Disorder will demonstrate signs of neural damage, problems with memory, poor social skills, and learning difficulties. Children diagnosed withShow MoreRelatedFetal Alcohol Spectrum Disorder ( Fasd )1451 Words   |  6 PagesPei,†Fetal alcohol spectrum disorder (FASD) refers to the diagnoses of damage caused to the fetus by alcohol exposure† (2012). It is the cause of abnormalities in children and can include effects such as communicating, socializing, controlling emotions, learning, remembering, understanding and following directions, and daily life skills. 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