What marketing plan should a hybrid nonprofit develop so that its unique model is understood? How should
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What marketing plan should a hybrid nonprofit develop so that its unique model is understood? How should marketing resources be allocated for research, public relations, and other marketing activities?
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National Investor Group is opening an office in Portland, Oregon. Fixed monthly costs are office rent ($8,100), depreciation on office furniture ($1,700), utilities ($2,000), special telephone lines ($1,500), a connection with an online brokerage service ($2,500), and the salary of a financial planner ($5,200). Variable costs include payments to the financial planner (9% of revenue), advertising (11% of revenue), supplies and postage (4% of revenue), and usage fees for the telephone lines and computerized brokerage service (6% of revenue). Read the requirements.¹ Requirement 1. Use the contribution margin ratio approach to compute National's breakeven revenue in dollars. If the average trade leads to $1,000 in revenue for National, how many trades must be made to break even? Begin by showing the formula and then entering the amounts to calculate the required sales dollars for National to break even. (Abbreviation used: CM = contribution margin.) (1) (2) (3) + = Required sales in dollars % = National must make trades to break even. Requirement 2. Use the equation approach to compute the dollar revenues needed to earn a monthly target profit of $12,600. Begin by selecting the formula to compute the required sales in units to earn a target profit. (5) (6) Target profit Rearrange the formula you determined above and compute the required number of trades to earn a monthly target profit of $12,600. National must make trades to earn a monthly operating income of $12,600. Now compute the dollar revenues needed to earn a monthly target profit of $12,600. National needs $ in revenues to earn a monthly operating income of $12,600. (After you hit continue the screen may take you below the beginning of the next step. If so, scroll back up to the top of the step.) Requirement 3. Graph National's CVP relationships. Assume that an average trade leads to $1,000 in revenue for National. Show the breakeven point, the sales revenue line, the fixed cost line, the total cost line, the operating loss area, the operating income area, and the sales in units (trades) and dollars when monthly operating income of $12,600 is earned. We will begin graphing the CVP relationships by first plotting the two points²: breakeven point and the point where monthly operating income of $12,600 is earned. (Enlarge the graph to medium size and use the point tool button displayed below to draw the graph. Be sure to select a label for each point plotted.) Dollars (Thousands) 80- Dollars (Thousands) 70- 60 50- 40 30- 204 10- 04m 0 10 20 30 40 50 60 70 80 Units (Trades) Next plot the following lines3: the sales revenue line, fixed cost line, and the total cost line. Review your answers from Requirements 1 & 2 and use those calculations to help you plot the required lines. (Enlarge the graph to medium size and use the line tool button displayed below to draw the graph. Be sure to select a label for each line drawn.) 80- 70- 60 50- 40 30 20 10- 04 0 10 20 30 40 50 60 70 80 Units (Trades) (After you hit continue the screen may take you below the beginning of the next step. If so, scroll back up to the top of the step.) A. O The final step in our graph is to determine where the operating income and the operating loss areas are on the graph that you previously prepared. Review the graphs and determine which has the correct shaded areas labeled for income and loss. (Enlarge each graph before selecting your answer.) 80- O Loss Income 0- wwyunyunyunywwwwwwww 0 1020304050607080 Units (Trades) B. 4 80- Inceme Loss 0-www wwwwwwwwwwwwwwww 0 1020304050607080 Units (Trades) C. 80- LOBS Income O-wegwegworzienz-> 0 1020304050607080 Units (Trades) D. 80- Income Loss 0- wwswwzwuzwnzwuzwazungung-> 0 1020304050607080 Units (Trades) Requirement 4. Suppose that the average revenue National earns increases to $1,500 per trade. Compute the new breakeven point in trades. How does this affect the breakeven point? Under new assumptions, National must make trades to break even.. With the increase in the average revenue per trade, the breakeven point in number of trades (7) National Investor Group is opening an office in Portland, Oregon. Fixed monthly costs are office rent ($8,100), depreciation on office furniture ($1,700), utilities ($2,000), special telephone lines ($1,500), a connection with an online brokerage service ($2,500), and the salary of a financial planner ($5,200). Variable costs include payments to the financial planner (9% of revenue), advertising (11% of revenue), supplies and postage (4% of revenue), and usage fees for the telephone lines and computerized brokerage service (6% of revenue). Read the requirements.¹ Requirement 1. Use the contribution margin ratio approach to compute National's breakeven revenue in dollars. If the average trade leads to $1,000 in revenue for National, how many trades must be made to break even? Begin by showing the formula and then entering the amounts to calculate the required sales dollars for National to break even. (Abbreviation used: CM = contribution margin.) (1) (2) (3) + = Required sales in dollars % = National must make trades to break even. Requirement 2. Use the equation approach to compute the dollar revenues needed to earn a monthly target profit of $12,600. Begin by selecting the formula to compute the required sales in units to earn a target profit. (5) (6) Target profit Rearrange the formula you determined above and compute the required number of trades to earn a monthly target profit of $12,600. National must make trades to earn a monthly operating income of $12,600. Now compute the dollar revenues needed to earn a monthly target profit of $12,600. National needs $ in revenues to earn a monthly operating income of $12,600. (After you hit continue the screen may take you below the beginning of the next step. If so, scroll back up to the top of the step.) Requirement 3. Graph National's CVP relationships. Assume that an average trade leads to $1,000 in revenue for National. Show the breakeven point, the sales revenue line, the fixed cost line, the total cost line, the operating loss area, the operating income area, and the sales in units (trades) and dollars when monthly operating income of $12,600 is earned. We will begin graphing the CVP relationships by first plotting the two points²: breakeven point and the point where monthly operating income of $12,600 is earned. (Enlarge the graph to medium size and use the point tool button displayed below to draw the graph. Be sure to select a label for each point plotted.) Dollars (Thousands) 80- Dollars (Thousands) 70- 60 50- 40 30- 204 10- 04m 0 10 20 30 40 50 60 70 80 Units (Trades) Next plot the following lines3: the sales revenue line, fixed cost line, and the total cost line. Review your answers from Requirements 1 & 2 and use those calculations to help you plot the required lines. (Enlarge the graph to medium size and use the line tool button displayed below to draw the graph. Be sure to select a label for each line drawn.) 80- 70- 60 50- 40 30 20 10- 04 0 10 20 30 40 50 60 70 80 Units (Trades) (After you hit continue the screen may take you below the beginning of the next step. If so, scroll back up to the top of the step.) A. O The final step in our graph is to determine where the operating income and the operating loss areas are on the graph that you previously prepared. Review the graphs and determine which has the correct shaded areas labeled for income and loss. (Enlarge each graph before selecting your answer.) 80- O Loss Income 0- wwyunyunyunywwwwwwww 0 1020304050607080 Units (Trades) B. 4 80- Inceme Loss 0-www wwwwwwwwwwwwwwww 0 1020304050607080 Units (Trades) C. 80- LOBS Income O-wegwegworzienz-> 0 1020304050607080 Units (Trades) D. 80- Income Loss 0- wwswwzwuzwnzwuzwazungung-> 0 1020304050607080 Units (Trades) Requirement 4. Suppose that the average revenue National earns increases to $1,500 per trade. Compute the new breakeven point in trades. How does this affect the breakeven point? Under new assumptions, National must make trades to break even.. With the increase in the average revenue per trade, the breakeven point in number of trades (7)
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Related Book For
Horngrens Accounting
ISBN: 978-0134674681
12th edition
Authors: Tracie L. Miller nobles, Brenda L. Mattison, Ella Mae Matsumura
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