The Importance of understanding break even analysis

The Importance of understanding break even analysis First of all, production managers and management accountants need to have a clear understanding of break-even analysis. This analysis is used as a general guideline for business decision making and is important for a number of reasons, including the ability to forecast the future cost and revenues and determine whether the business is making profit or loss, and also be able to develop a pricing strategy. The break-even analysis is based on marginal costing. 2008. Business Basics. 3rd edn. Essex: BPP publishing. The total cost of manufacturing or producing products or services is divided into two main parts = fixed costs and variable costs. Fixed costs are not directly related to the volume of production and should remain broadly constant while variable costs vary directly with the production volume and change directly when the production volume changes. [WWW]. http://journal .au.edu/au-techno/2007/JUL07/auJourna/Tech_article.09.pdf (20 November 2008) The Break-even point (BEP) is the point at which income and expenditure are equal, and so neither a profit nor a loss is made. When calculating the break even point the total fixed costs are divided by the contribution per unit. The contribution is the difference between the sales revenues and the marginal cost of sales (variable costs). 2008. Business Basics. 3rd edn. Essex: BPP publishing. Fixed Costs (FC) = Fixed production overheads + Fixed administration overheads + fixed distribution overheads FC = 200000 + 180000 + 120000 =  £500000 Variable costs (VC) = Direct materials + Direct wages + Variable production overheads VC = 350000 +50000 + 200000 =  £600000 VC per 1 unit = 600000 =  £12 50000 SR =1000000 =  £20 50000 Contribution = Sales revenue (SR) Variable costs (VC) Contribution =  £20  £12 =  £8 Break even point (BEP) = Fixed costs (FC) Contribution BEP = 500000 = 62500 units 8 Margin of safety (%) = 50000 62500 100 = -25% 50000 The business is left with 25% of their sales. Taking the role of the management accountant evaluate each of the four alternatives. Pay Salespeople a 10 % commission, in anticipation of them selling more and the business reaching the break-even point. FC =  £500000 VC =  £12 +  £2 (10% commission of SR) =  £14 SR =  £20 Cont =  £20  £14 =  £6 BEP = 500000 = 83334 units 6 The original sales = 50000 units 83334 50000= 33334 units 33334 100 = 66.7% 50000 By choosing this option sales production and sales would need to increase by 33334 units. This means that the business needs to sell 66.7% of products more than were the original sales to meet the break-even point. The business should consider that if they increase the production the additional warehouse may be needed so the stepped fixed costs will occur. This idea may be considered as an unrealistic. Especially now, the economic crunch is affecting every kind of business and the companies need to be aware of what strategy are they going to use in order to increase their sales. The demand for products is decreasing because people are aware of this economic situation. They are loosing their confidence to buy products. They prefer to buy only necessities. And also the business needs to be aware of what the competitors will do and how they will undergo the present situation. The management accountant should investigate some unpredictable situations. How does the business know that by paying sales people a 10% commission, the business will reach break-even point? Is there a guarantee that the business will sell more? How can we predict that the demand for the products will increase? Reduce the selling price by 10% in anticipation of increasing sales by 30%. Expected sales = 50000 + 30% (15000) = 65000 units FC =  £500000 VC =  £12 SR =  £20 20/10 =  £18 Contribution =  £18  £12 =  £6 BEP = 500000 = 83334 units 6 Profit/Loss = (65000 x 6) 500000 =  £110000 loss Margin of safety (in units) = 65000 83334 = (18334) units Margin of safety (%) = (Expected sales breakeven sales) 100 Expected sales Margin of safety (%) = (65000 83334) 100 = 18334 100 65000 65000 Margin of safety (%) = -0.2821 100 = (28.21 %) By reducing the selling price by 10% the sale should increase by 30%. The break-even analysis presents that even if we sell 15000 units more the business would be left with 18334 units which represents 28.21 % of the production. Reducing the selling price by 10% may be a good pricing strategy that may increase customers demand for the product but even if we sell the expecting amount of units there will be a loss of  £110000, and not just that a new warehouse may be needed because of the increased sales. The stepped fixed costs occur. The management accountant needs to look for external factors which are affecting the demand for the product. Will this pricing strategy lead customers to buy more products? What the competitors will do? Will they decrease the selling price or will they invest money in improvements? Increase direct wage rates from  £4 to  £5 per hour as part of a productivity/pay deal. It is hoped that this will increase production and sales by 20%, but advertising costs would increase by  £50000. Expected sales = 50000 + (20%) = 60000 Direct wages =  £200000 :  £4 = 50000 hours New direct wages =  £5 ÃÆ'- 50000 =  £250000 FC = 250000 + 180000 +120000 =  £550000 VC = (350000 + 250000 + 50000) =  £13 50000 SR =  £20 Contribution =  £20  £13 =  £7 BEP = 550000 = 78572 units 7 Profit/Loss = (60000 x 7) 550000 =  £130000 loss Margin of safety (in units) = 60000 78572 = (18572) units Margin of safety (%) = (78572 60000) = 18572 x 100 = 31% 60000 60000 Increase of direct wages is a good motivation strategy which may increase the production by 20%. However this is not enough to cover the additional increase of wages and advertising costs. This scenario is clearly not a practicable option because the business will be left with 18572 units in the inventory and they will have a loss  £130000 loss. In the present economic situation is very risky to invest in the advertising because there is no guarantee that the demand for the product will increase as people are buying the cheapest products and services. In anticipation to produce and sell more a new warehouse may be needed. This means that the stepped fixed cost will occur. Can the company deal with  £130000 loss? What will the competitors do? Will they invest in the advertising or they will reduce the selling price? Increase sales by additional advertising of  £300000, with an increased selling price of 20%, setting a profit margin of 10%. FC = 500000 + 300000 =  £800000 VC =  £12 SR =  £20 + (20/10) ÃÆ'- 2 =  £24 Contribution =  £24  £12 =  £12 BEP = 800000 = 66667 units 12 Margin of safety (%) = (73334 66667) 100 = 9.1% 73334 Sales Volume to achieve a target profit = Fixed cost + target profit Contribution per unit Sales Volume to achieve a target profit = 800000 + 80008 = 73334 units 12 73334 units need to be produced and sold in order to produce a profit of 10%. This option can be considered as the most prosperous of all 4 options. However the business needs to deliberate that the increase of selling price by 20% is very unsecure. Particularly now the market is very unstable and the companies should try to sell everything they have. Producing more products is very risky. There is no guarantee that the sales would be made. Everything depends on customers. Many examples could be used from news. For instance, sales of cars fell by 23% and people are not going to the restaurant for their meal, they are saving their money and buying only necessaries. The business needs to be aware that the demand for the products is decreasing and not increasing. Why they want to produce more products? Also the business needs to be careful with the investment in adverting. The cost of advertising may be hard to cover. A positive thing is that if the company orders more material to produce more products, the suppliers may offer a discount. The business needs to take in consideration the competitors in the market and what they would do. Will they reduce the selling price or will they invest in advertising? The management accountant should investigate all the factors that may affect the demand for the product and watch the economic situation. What are the limitations of break-even analysis? Do these limitations invalidate it as a reliable business analytical tool? The limitations of break-even analysis The break-even analysis is based on forecasting and has a certain limitations which should be considered. It is not always possible to predict what will happen on the market. The linear relationship is based on the presumption that costs remain constant. However this is not the case in practical market situations. The business may get some discount from its suppliers. Also the business can often reduce its selling price in order to increase its sales volume and this is an efficient strategy known as a non-linear relationship. Scarlett, R. 2007. Management Accounting Performance evaluation. Butterworth-Heinemann The business need to bear in mind that if a production increases or decreases it may result in expansion or reduction of capacity. If the Henllys scenario is used, in each case there is an anticipation of increased sales and production and this means that a new warehouse may be needed. The stepped fixed costs occur and this situation result in multiple break even points. Wood, F. Sangster, A. Business Accounting 2, 2008, 11 edn. Essex: Pearson Education Limited. Pg. 656. Apart from the situation described above the product mix need to be applied as well. Many organisations have more then one product or service and this can have an impact on the apportionment of fixed costs which can become arbitrary. Scarlett, R. 2007. Management Accounting Performance evaluation. Butterworth-Heinemann The break-even analysis is internal and it is not used to consider the things like competition or market demand which means that the business should use other analysis to watch what is happening on the market and what strategies are used by competitors. These limitations explained above invalidate our break-even analysis as a reliable business analytical tool.

The Choice to Marry :: Essays Papers

The Choice to Marry John Stuart Mill, an ardent and foundational liberal theorist, aims for apparently thorough women’s liberation through freedom and equality. To the extent that he succeeds and fails, it is largely because of his liberal understanding of humans as partially constituted by their social situation and yet partially autonomous sources of reason. Mill, following Wollstonecraft, argues that women have been systematically undereducated and neglected by society, thus channeled into a marginalized status. This condition is then used as evidence of the inferiority of women in justification and reinforcement of the very structures that constitute women (Mill 23). For this problem, Mill offers a solution of institutional change that alters the mindsets of individuals in society, and structurally transforms the laws and norms that marginalize women. Mill’s basic goal is for women to gain formal equality, from which substance will follow. He also calls for liberty, partly as an extension of equality and partly as ability for a woman to define and determine herself (in ways, he later clarifies, that â€Å"mankind be †¦ better off† (Mill 85)). Therefore, just as men, with whom women ought to be made equal, can decide what career they would pursue, so too should women be allowed to select if they become a chemist, shopkeeper, or wife. However, in the case that a woman chooses to be married, she should take on domestic duties, as he suggests this is what it means to become married. She may still keep whatever extraneous pursuits she chooses, so long as they do not conflict with her domestic duties. In this step, Mill retreats from â€Å"profession† as an entirely determined term, to one with some allowance for variations on the theme, wherein â€Å"freely chosen† side activities can be added to the married woman’s role. For Okin, Mill’s premise of liberal feminism may be acceptable, but his neglect for the economic and daily realities of domestic duties discredits his conclusions. Economically, Okin accepts Mill’s advocacy of independent property for husband and wife, but complains that this formal equality of parallel property entitlements forgets that women in domestic roles will not create the property men do, because their work is unpaid (Okin 228-299). Mill’s â€Å"assumption of the immutability of the family structure† (Okin 228) also reinforces the conditions which initially gave rise to women’s distortion into the beings who men consider inferior and more simply forces upon women the drudgery of homemaking.

“Futility” by Wilfred Owen Essay

The poem titled â€Å"Futility† meaning uselessness or pointlessness. Owen is trying to say this war is the pointless war. The soldiers are useless that they’re dead. No matter how much the soldier work, it doesn’t worth it. The poem is written in fourteen lines and divided into two verses. The two verses are contrast each other. The first verse’s atmosphere is quite, soft, tender and peaceful and the second verse’s atmosphere sounds more desperate, frustrate, ridiculous and demanding for something to happen. In the first verse, three verbs that describe the action of the Sun, move, gently, and touch are quite soft and tender. These verbs describe that the sun move softly, gently and touch the soldier to wake him up. The sun here means the sun that shines everyday to wake the man and at the same time it may symbolize religious. The sun that used to wake him up and care for him. It’s metaphor that the sun moves the man into the light. The third line of verse one, it mentioned that the soldier was once a farmer. The word whispering is onomatopoeia meaning the sun is whispering to the man about the memories the man used to have on the farm. It’s a soft and tender plus pleading together. â€Å"Unsown† means that the field has not seeded but yet the sun is shining now to tell the man that it’s the beginning of the planting season now. In other meaning, the word unsown is metaphor that the soldier is still too young for them to join the war, as they haven’t start their adult life yet. The fourth and fifth lines, ‘Always it awoke him, even in France, until this morning and this snow.’ The sun symbolizes the warmth of life and the snow symbolizes the coldness of death. The sun always arouses him everywhere even he’s in France but this morning is different because snow has partially block the man so the man wasn’t able to wake up. The word morning has two different meaning. One is the everyday morning, which is the beginning of the day and the second meaning referring to the word mourning. Owen is mourning for the man who has die. The last two line of the last two line, Owen is pleading to god, please please if anything can rouse him now please do it and in this case only god who can do it. Only the old sun that used to be very kind can wake him up now. The sun here is personified by referring the sun as old and kind. Through the whole verse Owen create the sound by using assonance of the repetition of â€Å"ow† sound in woke, unsown, snow, rouse, now and know. Owen used an imperative verb, think, at the beginning of the second verse. It’s order the reader to think and at the same time Owen also make it sound more desperate. He is desperate to think on how the sun will wake the seeds. The seeds here give the image of growth and nature and it symbolized the beginning of life. He is desperate to ask how god wakes the soldier that is already died on the ground. The third line of the second verse mention the word â€Å"limbs†, it has two meaning. First a limb is a branch of a tree, which fit in with the nature. Second meaning means the pair of legs, arms and wings. Owen means that god create these nature and mankind. The line after this said â€Å"full-nerved, –still warm, — too hard to stir?† Owen means that he still don’t understand how the sun gives life to seeds, but not the warmness to these soldier. The fifth line â€Å"Was it for this the clay grew tall?† this refer to the war. Clay is mud and mud comes from Earth. The clay grew tall; in this case the clay symbolized man. In this line Owen was asked what was this war for? Do we do all this to kill? Is this why we put him on this Earth? So what is the point of life? The last two lines â€Å"—O what made fatuous sunbeams toil to break Earth’s sleep at all?† Owen ask this question starting with what made, he means what is the point of sending these men these men to the war and died there? It’s seems so silly that the sun create life for these him and then let them died with regret. The first verse focuses upon a dead soldier and second verse asked why the sun is shining at all. Why there is life when there is such a suffering, Owen is trying to say if the sun can wake up life on Earth but why can’t it wake up his soldier because what he thinks is that if anything could make the soldier it must be the sun.

20 Cause Effect Essay Topics Interesting Issues to Debate about Environment

20 Cause Effect Essay Topics Interesting Issues to Debate about Environment If you are tasked with writing a cause and/or effect essay on the book â€Å"Living Downstream† written by Sandra Steingraber, then chances are you are facing the most challenging part of the writing process: selecting your topic. Picking the perfect topic can be difficult, at best, especially when you consider how many great topics there are in relation to this book. Thus, below you will find twenty topics that might be beneficial for you, or useful for your next assignment. Remember that these are only meant as a guide and may not be specifically applicable to your assignment: How Agricultural and Industrial Pollutants Have Been Shown in Medical and Scientific Assessments to Be Linked to Cancer Rates Which Environmental Factors Have Resulted in Higher Cancer Rates, and Which Cancers Specifically What Environmental Factors Have Been Scientifically Studied as Links to Cancer Compared to Genetic Cancers What Has Caused the Imbalance Between Scientific and/or Medical Studies for Environmental Factors versus Genetic Factors in Cancer Which Carcinogens Are Most Profoundly Influential and Detrimental to People and What Effects Do They Have What Causes Carcinogens to Enter the Body and Damage Living Tissue What Has Caused Cancer Rates Among Adults to Increase From a Mere 25% back in the 1950’s to 50% for Men and 40% for Women Today What Effect Increased Introduction of Chemicals into All Areas of Life Including Clothing, Food, Tools, and Housing Products Has Had on Society What Causes Immigrants To Show Signs and Symptoms of the Cancers Prevalent in Their New Home rather than Those of Their Place of Birth What Causes More and Higher Rates of Cancer to be Prevalent in Urban Regions Compared to Rural Regions What Effect Heavy Pesticide Use Has On Rural Communities What Effect Chemical Factories Have on Cancer Clusters in Nearby Populated Areas What Causes Cancer Clusters to Grow in Regions outside of Heavily Polluted Valleys or Rivers What Effect Pollution in Fresh Water and Salt Water Areas Has Had on the Local Fish Species How Polluted Water Has Impacted Fish and Shellfish Populations Compared to the Same Fish Species Living in Non-polluted Waters What Has Caused Cancer Rates in Children to Rise Steadily in spite of No Lifestyle Changes Over the Course of the Last Fifty Years What Effect Damage to the Endocrine and Immune System Has to the Body and the Promotion of Cancers within the Body What Effect Raising Awareness About the Toll That the Use of Chemicals Has Had on The Human Economy and Resulting Cancers Has Had What Effect Acting on Partial Scientific Evidence Can Have For Society What Effect the Adoption of a New Way of Looking at Chemicals Can Have on Human Rights Aren’t those great topics? Of course, just seeing the list of topics may not be everything that you need to get started on your own work. That’s why we prepared facts that will help to understand the book and a writing guide that will help to master cause effect essay writing. Below you will find a great essay sample below on the topics. Cause Effect Sample Essay â€Å"The Causes of an Imbalance between Scientific and/or Medical Studies for Environmental Factors vs Genetic Factors in Cancer† The causes of an imbalance between scientific and medical studies for environmental factors which cause cancer versus genetic factors that cause cancer is simple politics and money. Environmental concerns are something which have been often compared to that of politics. There are many political organizations responsible for funding individual research efforts, affording grants, and ensuring that only particular angles are covered. While the book â€Å"Living Downstream† has raised a great deal of serious concerns, it   would stand to reason that the work is not able to garner as much attention as it should because it does not play the political game, and instead the political game is playing everyone else. Of course, the book by Dr. Sandra Steingraber is a collective work which ignores the politics associated with environmentalists and instead provides data and data alone to convince the reader of the current cancer epidemic and the harmful source of said epidemic: chemical residues and pesticides which are now almost entirely prevalent across the whole environment. By not playing the political game, the doctor’s work has not raised the alarm that it should have and has not garnered the worldwide call to arms to stop the pollution and take preventative measures. Part of the reason for this is the fact that existing research, both medical and scientific, has followed closely the rates of genetic cancers and from that has claimed that cancers rates over the last fifty years have dropped and not risen as was claimed in the book. This is misleading at best. The studies, as clearly covered by the author, are not comprehensive nor do they take into account the environmental factors or cancer rates not related to genetic cancers. Additionally, one must refer back to the politics of the game and review the organizations behind the research, behind the grants, and behind the studies. The results which have opposed any increase or harm brought about by chemicals and pesticides have all originated in studies which have circumventing the main point brought to the surface by Dr. Sandra Steingraber in a clear attempt to avoid discussing the real problem. By focusing financial and, as a result, research efforts on genetic cancers, news sources report reduc ed cancer rates and people see no reason to stop exposing themselves to harmful chemicals. Overall, the causes of an imbalance between scientific and medical studies for environmental factors which cause cancer versus genetic factors that cause cancer is simple politics and money. With a focus on genetic cancers and a complete ignorance of environmental factors, big companies who are using said pesticides and chemicals and profiting from them do not have to take a hit to their profits. References BIOLOGICAL EFFECTS OF PESTICIDES OF PESTICIDES IN MAMMALIAN SYSTEMS.  The Sciences  7.3 (1967): 33-38. Web. Chemical Carcinogens: A Review Of The Science And Its Associated Principles. U.S. Interagency Staff Group On Carcinogens.  Environ Health Perspect  67 (1986): 201-282. Web. Pesticides And Wildlife.  Oryx  7.05 (1964): 213. Web. Eckardt, Robert Edward.  Industrial Carcinogens. New York: Grune Stratton, 1959. Print. GROVER, P. L. Chemical Carcinogens.  Science  204.4399 (1979): 1301-1301. Web. Noà «l, Bernard. Pesticides.  Lignes  33.3 (2010): 62. Web. RENWICK, A. G., and B. S. DRASAR. Environmental Carcinogens And Large Bowel Cancer.Nature  263.5574 (1976): 234-235. Web. Steingraber, Sandra.  Living Downstream. Reading, Mass.: Addison-Wesley Publishing, 1997. Print.

The divine command theory essays

The divine command theory essays The Divine Command Theory can be a hot topic for some people to discuss in the field of philosophy. The Divine Command Theory states that an act is permissible or obligatory if and only if that act is allowed or commanded by God. (Class notes 1/12/05) To believe in this theory is to believe that God is good in everything he commands and wills a person to do. This theory though has a few holes that can cause controversy and debate among philosophers, such as the question Socrates expresses in the Euthyphro, Are morally good acts willed by God because they are morally good, or are they morally good because they are willed by God? (Plato: Euthyphro) I believe that all acts that are willed by God are good and have bigger purpose than humans are willing to believe. God is the creator of the universe and all that is good and pure; it is in his nature to do good things. God created and blessed all people with a unique creaturely calling. (Genesis 1:26) If one is to believe in the Divine Command Theory, then one must believe that God has nothing but the purest and best intentions. When God created humans, they were as pure as the driven snow, but when the Fall of Humanity happened, sin was introduced to man. The Fall of Humanity means that we cannot know Gods truth and ways by reason or any means other than a personal revelation. So, in order to understand Gods will, we must trust in Gods commands. Even though we may not be able to understand why he commands or wills some things. There are many arguments that hold true to the Divine Command Theory, such as the Abraham argument. This argument states that if the Divine Command Theory is correct, then no matter what God were to will, it would be morally required. (http://courses.washington.edu/phil332) This is evident in the bible with the story of Abraham, in this story, God commands Abraham to kill his one and only son Issa ...

Pangrams and Lipograms

Pangrams and Lipograms Pangrams and Lipograms Pangrams and Lipograms By Maeve Maddox Ive long known that the sentence The quick brown fox jumps over the lazy dog contains every letter of the alphabet. What I didnt know is that such a sentence has a special name. Its a pangram. pangram from the Greek pan every, and gramma letter also called a holoalphabetic sentence; a sentence or (occas.) verse, containing every letter of the alphabet (OED). A perfect pangram would contain each letter only once and wouldnt make much sense. For example: Jink cwm, zag veldt, fob qursh pyx A lipogram is a sentence that is missing one or more letters. lipogram from a Greek word meaning to be lacking (no relation to liposuction in which the lipo is from a word for fat) The OED definition is a composition from which the writer rejects all words that contain a certain letter or letters. One Christmas I received a card from a friend with a droll sense of humor. It took me a while to figure it out. Although it is not a sentence, I think that it can count as a lipogram. Heres the message that was inside the card: a b c d e f g h i j k m n o p q r s t u v w x y z Hint: Whats another word for Christmas? See the fascinating Wikipedia List of pangrams Want to improve your English in five minutes a day? Get a subscription and start receiving our writing tips and exercises daily! Keep learning! Browse the Vocabulary category, check our popular posts, or choose a related post below:English Grammar 101: All You Need to KnowLatin Plural EndingsPrepositions to Die With

Informal assignment Example | Topics and Well Written Essays - 500 words

Informal - Assignment Example The traces of chemical engineering is everywhere and affects every aspect of our lives. The application of chemical engineering is wide ranged. A chemical engineer may make design about a certain product and create the new processes to make such product. Such product may be used in our daily lives such as the toothpaste in our bathrooms to medicines that heals us to productivity tools that we used to produce other things such as computers or machines. Chemical engineers can also operate and manage facilities be it in the manufacturing, business organizations or oil rigs. The strict application of the course have help develop products such as polymers, plastics, petrochemicals, even the food that we eat. Chemical engineering basically touches everything that we use and consume because it is the science of converting a raw material into another useful form through chemical reaction. Chemical engineering major may not be an easy major to take because it requires a solid foundation in math and science. It requires a solid foundation in natural sciences such as chemistry and physics as well as life sciences such as biology, and biochemistry which explains why it covers a lot of application. Taking the course however is rewarding because of the many fields that one can practice the profession. It is not only limited to engineering but also includes various fields from engineering, economics to business that many of top executives today have chemical engineering as their academic background because of the many applications of the course in the professional field. If one wants to be useful and contribute more to society, chemical engineering is the right course for one to take. Its contribution to society and our daily lives can only be imagined if chemical engineering as a course did not exist. Without chemical engineering, we would be back to the stone age where we would not know how to harness our raw materials into useful