Bill French Case

1. What are the assumptions implicit in Bill French’s determination of his company’s break-even point? He has assumed that there is only one break-even point for the firm’s three products by taking the average. Labor Union will not affect the product prices no effect on the break-even analysis. Constant dividends were given to stockholders. Production of product â€Å"A† will be decreased and the other hand product â€Å"C† capacity will be increased. Sales price will be constant. 2. On the basis of French’s revised information, what does next year look-like: a. What is the break-even point? Break-even point for product â€Å"C† is 354,545. 45 and overall is 1,035,688. 31. b. What level of operations must be achieved to pay the extra dividend, ignoring union demands? In order to pay the 50% extra dividend and to retain $150,000 profit the firm needs $600,000 profit after taxes and because half of the profit goes through the government the firm needs profit before taxes of ,200,000. c. What level of operations must be achieved to meet the union demands, ignoring break-even points? FC + Union Demands/Unit Contribution to Sales Union Demands = (6,750,000 x10%) = 675,000 2,970,000 + 675,000/. 375 $9,720,000 d. What level of operations must be achieved to meet both dividends and expected union requirements? FC + Target Dividend + Union Demands/Unit Contribution to Sales 2,970,000 + 450,000= (300,000(300,00050%) +675,000/. 375 $10,920,000 3. Can the break-even analysis help the company decide whether to alter the existing product emphasis? What can the company afford to invest for additional â€Å"c† capacity? Considering per unit dollar contribution of product â€Å"C† to â€Å"A† is higher, the other factor is sales. And variable income to sales price is higher than C compensated by its lower sales. Increase in production of product â€Å"c† must not incur $300,000 of cost. 4. Calculate each of the three products’ break-even points using the data in exhibit 3. Why is the sum of these three volumes not equal to the 1,100,000 units’ aggregate break-even volume? It’s different because each of the products has different contribution margins, fixed cost, and volume sales. 5. Is this type of analysis of any value? For what it can be used? It allows differentiation of profits especially if the business is not engaged only on a single product. It helps business to identify how much still they have to sell/hurdle to earn profit. A tool that may help an entity set its sales or production target.

Absorption costing and marginal costing compared Assignment

Absorption costing and marginal costing compared - Assignment Example In contrast to this, marginal costing, which is also called variable costing, takes into account only the variable cost as product cost for the calculation of profit. The profit calculation under this method involves two stages, namely contribution and profit. Contribution is the difference between sales proceeds and variable costs. The calculation of contribution is essential in certain types of firms where there are many period costs and also it is necessary to calculate the costs of each product and / or department or process. Once contribution is ascertained, the next step is the computation of profit of the business, which represents the overall profits of all product, department or process, by deducting fixed expenses from the contribution so achieved. If the contribution exceeds the fixed costs, the resultant figure is known as profit. When it is negative, the firm is incurring a loss. There are also chances of both contribution and fixed expenses being the same, such a situat ion is called no profit no loss point or technically, break-even point. Under absorption costing, all costs whether fixed or variable are treated as product costs. The cost units are made to bear the burden of full costs even though fixed costs are period costs and have no relevance to current operations. Under the marginal costing technique, however, only variable costs are treated as product costs and the fixed costs are transferred to costing profit and loss account in full to be deducted from the contribution to ascertain profit/loss Under absorption costing technique, inventories of work-in-progress and finished goods are treated at full costs, while marginal costing values finished and work-in-progress inventory at their variable cost. Naturally, the method of valuation has the effect of carrying over fixed cost to the subsequent period under absorption costing and this will not happen in the case of marginal

Illegal Immigration's Destructive Impact on the Economy of the United Research Paper

Illegal Immigration's Destructive Impact on the Economy of the United States of America - Research Paper Example This essay discusses that much debate has raged over immigration policies in the United States. In the past, the United States had reached out with open arms to immigrants coming from distant shores who want to make this country their home. As a result of this, we have seen America become a melting pot of cultures, offering its embrace to the poor and downtrodden. In many instances, however, the picture was far from pretty. The famous book â€Å"The Jungle†, written by Upton Sinclair, was seen by many as a shocking expose into the sordid world of the meatpacking industry and the abysmal working conditions of the meatpackers, who were composed mainly of immigrants desperate for livelihood opportunities in what for them was a completely new frontier. Few saw it for what it was meant to be: a compelling saga of the poverty hopelessness, and crime that attended the lives of the working class immigrants of America from the period spanning the end of the Civil War to the beginning o f the First World War. Unfortunately, that story takes place even today, as illegal immigrants find themselves caught in a life of poverty, dependence and crime. There are plenty of illegal immigrants in the United States, many of whom are from nearby Hispanic countries, most notably Mexico. It has been found that when the purchasing power of the dollar increases in Mexico, illegal immigration increases, suggesting that illegal immigration is brought on by economic reasons.... We refer to those who engage in drug trafficking, in human trafficking, in illegal possession of firearms, in petty crimes. The big debate therefore is what to do with these illegal immigrants. Do we send them to our jails and thus spend taxpayer’s money for their care and upkeep, or do we institute deportation proceedings and send them back to their home countries? This paper will argue that illegal immigrants who have been arrested, charged criminally and found guilty by our criminal justice system should be subjected to deportation proceedings rather than be imprisoned in domestic jails. I will argue first on the resources aspect, and will discuss how keeping them in our jails drains this country of much-needed resources especially during a time of recession. Second, I will argue on the social-economic aspect, and look into how keeping them in domestic jails can possibly worsen the crime problem, because it will still allow them to operate criminal cells here in the country . In turn, this is a problem for the economy because it encourages the black market and the criminal enterprises and syndicates that render markets imperfect. Then, I will also argue how the immigration problem is unduly clogging the dockets of the courts, making it difficult for judges and prosecutors to focus on crimes such as robbery and murder, and thus leaving communities unsafe and vulnerable and affecting local economic activity. Finally, I will argue that on the political- economic aspect, it is only deportation that can send a strong, zero-tolerance message against illegal immigration – of particular importance at a time when illegal immigration is siphoning off much-needed jobs from the local population, and is draining the nation’s coffers by using up