Trade Shows

Necklace Earrings Per order Necklace

Order Size 25 12 Order Size 2
Selling Price 17 12 Selling Price 34
Sales Value 425 144 569 Sales Value 68
Variable Cost 8.05 5.5 Variable Cost 8.05
Contribution per unit 8.95 6.5 301.75 Contribution per unit 25.95
Contribution margin rate 53.0% Contribution margin rate

Total Fixed Costs Per show 10 shows Total Fixed

Registration costs 3000 30000
Booth costs 133.3333 1333.333
Booth shipping 1500 15000
Travel costs 2000 20000
Samples and promos 2800 28000
9433.333 94333.33

Break-even analysis Break Even Point

Total fixed costs 94333.33 # of orders
Contribution per order 301.75 Value
Break-even # of orders 312.6208
Break-even value 177881.2 177881.2 Sales to make a profit of 100,000
Desired Profit
Sales required to make desired profit Desired contribution
Desired profit 100000 # of orders
Desired contribution 194333.3 Value
Contribution per order 301.75
No of orders 644.021
Sales (value) 366447.9 366447.9

Sensitivity Analysis Low High Total Marketing budget

No of original orders 20 45 Rate per click
No of repeat orders 20 45 No of clicks
Total No of orders 40 90
No or orders for 10 show 400 900 Low
Contribution/order 301.75 301.75 Conversion 3%
Total Contribution 120700 271575 No of orders 2695.229
Less: TFC 94333.33 94333.33 Contribution per order 70.4
Total Profit 26366.67 177241.7 Total Contribution 189744.1
Less: TFC 94333
Expected Profit 95411.09
Online
Earrings Per order
1
24
24 92
5.5
18.5 70.4
76.5%

94333

1339.957
123276.1

100000
194333
2760.412
253957.9

94333
1.05
89840.95

High
5%
4492.048
70.4
316240.2
94333
221907.2
 # trade shows Registration

10 3000

Sales of NeclacesPair of earings

Order Size 25 12

Sales Price / Unit 17 12

Variable cost / Unit 8.05 5.5
Contribution / Unit 8.95 6.5

Total Sales Revenue 425 144

Total Contribution 223.75 78
Contribution Margin Rate

Learnings https://www.investopedia.com/terms/c/contributionmargin.asp

Total Fixed Cost Per show 10 Shows

Registeration 3000 30000

Booth cost for per Show 133.333333333 1333.33333
Shipping cost 1500 15000
Travel cost 2000 20000
Adv 2800 28000

Fixed Cost 9433.33333333 94333.3333

Break even analysis

Fixed Cost 94333.333

Total Contribution 301.75
Break even # orders 312.620821872
Actual Break Even value 177881.247645
 Problems of Self Study

1 Direct Material cost 4600000

Plant Leasing cost 540000
Total units 900000 1000000

Direct Material cost of each uni 5.11111111111

Plant leasing cost / unit 0.6 (ans is 6)

Ditect Material cost is Variable

2 cost so it will grow 100000 Units growth
Direct Material Cost 5.11111111111

Plan Leasing cost remains

unchanged 0.54 (ans is 5.4)

1-Jan

Number of guest 0 50
Fixed Cost 14000 14000
Variable Cost 0 3750
Total Cost 14000 17750
 Booth cost
for 30
# hours # of Days shows Validity of Booth Shipping cost of booth

18 8 4000 30 1500

Online

Order Size

Selling Price / Unit

Variable cost / Unit
Contribution / Unit

569 Total Sales Revenue

301.75 Total Contribution
53.03% Contribution Margin Rate

m/terms/c/contributionmargin.asp

Total Fixed Cost

Registeration
Booth cost for per Show
Shipping cost
Travel cost
Adv

Fixed Cost

Break even analysis

Fixed Cost
Total Contribution
Break even # orders
Actual Break Even value

Now to calculate Profits

Expected Profits 100000

Fixed Cost 94333
Contribution 194333
 # of orders 2760.41193182
value 253957.897727

Solved Examples

1 Manufacturing cost / unit ? 2.21

Supreme Delux Regular

Units Produced 80 120 100

Direct Material cost 84 54 62
Direct Manufacturing Labour 14 28 8

Manufacturing overhead cost 42 84 24

Manufacturing cost / unit 1.75 1.38333333 0.94

Salaries are indirect

unless it is Labour paid
2 hourly wage

Depreciation is Fixed
unless
units of output of
depreciaiton
which then would be
variable
License cost is avoided
in Variable cost
Music costs 10000 per event
Catering cost
Food 65 per guest
Setup / Clean up 15 per guest
Fixed Fee 4000 per event
Discount 5 per guest

100 150 200 250 300

14000 14000 14000 14000 14000
7500 11250 15000 18750 22500
21500 25250 29000 32750 36500
 Travel cost of
Partners / show Adv

2000 2800

2 1

34 24
8.05 5.5
25.95 18.5

68 24 92
51.9 18.5 70.4
Margin Rate 76.52%

Per show 10 Shows

3000 30000
133.333333333333 1333.33333
1500 15000
2000 20000
2800 28000

9433.33333333333 94333.3333

94333.333
70.4
1339.96211647727
123276.514715909
Cost Plant Mng costs 120000000 per year
Leasing cost 180000000 per year
Wage 70000 per surfer
Direct Material cost
Steel 150000 per surfer
Tires 12500 per tire
Licene

0-500 5000000
501-1000 7450000
>1000 20000000

Total Vehciles 110

Tyres each Surfer 5

Variable Man Cost / Veicle

Wages 7700000

Steel 16500000
Tires 6875000
Number of Tires used 550
Variable Man Cost / Veicle 282505 License Cost 7450000

Fixed Manufacturing cost

Cost Plant Mng costs 120000000
Leasing cost 180000000
Minimum License cost 7450000
Fixed Manufacturing cost 32450000 per Month
 4.33
Year 1
Employee 50
Avg budgeted payment / professiona 208000 per year
Budgeted billable hours 3200 per year
Budgeted indirect cost 4400000 per year

Job Costing system

Direct Cost 10400000

Indirect Cost 4400000
Total Cost 14800000
Total Billable hours / year forn 50 e 160000

2 Direct cost / hour 65

3 Indirect cost / hour 27.5
4a&b Requirement of Hours 100 150
Cost estiamation
Direct cost 6500 9750
Indirect cost 2750 4125
Total cost 9250 13875

4.34

Total Cost for Associate 10000000

Total Cost for Partner 4800000

a Avg Per Partner compensation 400000 per year 160000

No. of Partner 10 40
Billable hours per Partner 3200 per year 3200
Total Billable hours 32000 128000
Direct Cost Rates per Partner 125 per hour/professional 50

b Total General Support cost 3600000 Total Sec Support cost 800000
Total Billable hour of Associalte 160000 Total Billable hour of Partner 32000
Indirect Cost Rates 22.5 Indirect costs 25

c Saw Pipes
Total hours Partner 120 hours
Total hours Assocociates 80 hours
Budgeted hours Partner & Ass 24500
per hour / professional