“The major factor that will underlie the cost structure of a business is the level of risk that managers are prepared to take and the level of expected sales volume.” Explain.
Answer to relevant QuestionsHow can break-even analysis help managers make pricing decisions? Give an example. A company expects to sell 75,000 widgets at a price of $10.00. The unit variable costs are estimated at $8.00, and the fixed costs are estimated at $125,000. On the basis of this information, calculate the following:1. ...In March 2003, Vincent and Anne-Marie Finney started their carpet-cleaning services business in Toronto. The business was geared primarily at young couples; a market that they felt was growing rapidly. Vincent and Anne-Marie ...How can accelerating the flow of cash improve ROI? With the information from Exercise 2, calculate the company’s CCE ratio for 2012 and 2013. Assume that in 2011 the company’s net working capital was$350,000.
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