bill french accountant
...le and expanding product line to utilize fixed costs. After determining the profitability of the aggregate of the products, consider taxes, and whether the firm can still accommodate dividends, expected union demands, and product emphasis. Cost Control Analysis is a valuable analytical tool that can be used in this case. Cost control analysis is a means of learning how costs and profits behave in response to changes in the level of business activity. Cost-volume relationships is essential during the budgeting process to set sales targets and to estimate costs and expenses. Also, these relationships can provide information that is useful in a wide variety of planning decisions. For instance, in the case of Duo-Products Corp, by using the Cost Control Analysis, the firm can determine the level of sales that must be reached to cover all expenses that breaks even. Moreover, the company can also use Cost-Profit Volume Analysis for the firm’s other concerns such as union demands and bonus-dividend plans. It tells how many units of product that must be sold to meet union demands and pay bonus dividends to its shareholders. Cost-Volume-Profit-Analysis can be applied to business as a whole, to individual segments of the business such as division, or department, or a particular product line. Analysis. Bill French assumed that everything was constant during the last year: the sales price for all products, the sales mix, fixed cost, demand for each product, as well as the variable manufacturing costs. That the fixed cost is constant means that the company is operating within its relevant range. For the coming year, the group has adjusted some of the numbers to determine the company’s profitability using some of the suggestions raised during the meeting, as per participant’s concern. In computing for the break-even point for each product, the firm’s break-even point for product “A” is 384,000 units or $3,840,000. For product “B,” 297,142.85 units or $2,674,287, and for product “C,” is 500,000 units or $1,200,000. In doubling the sales price for “C” per unit as the company’s repositioning of the product to salvage the product’s quality reputation, the new breakeven point for “C” is 136,363.63 units or $654,545.42. In considering Fred William’s concern for plant allocation of $60,000 per month, the new breakeven point for “A” is 477,043.2 units or $4,770,432. New breakeven point for “B” is 369,140.57 units or $3,322,265.14 and new breakeven point for “C” is 169,404.55 units or $813,14 1.82. In order to meet union demands, a 10% increase in variable costs should be allotted per product. In order to breakeven, 681,490.29 units or $6,814,902.9 of product “A,” 397,944.15 units or $3,581,497.35 of product “B,” and 177,471.43 units $851,862.86 of product “C” needs to be sold. These new breakeven points display the changes in production and sales of products “A” and “C,” as well as an increase in fixed cost by $60,000 per month and a change in the sales price of “C” from $2.40 to $4.80 and the 10% increase in variable costs. That means that the company needs to produce ...