Task: Budget Project Questions
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Plan
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Actual
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Actual
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Sales
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1000000
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1
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1200000
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1
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800000
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1
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Variable Costs
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Cost of Sales
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600000
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0.60
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720000
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0.60
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480000
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0.60
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Commissions
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50000
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0.05
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60000
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0.05
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40000
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0.05
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Delivery
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10000
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0.01
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12000
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0.01
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8000
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0.01
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Bonus
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50000
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0.05
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60000
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0.05
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40000
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0.05
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Total
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710000
|
0.71
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852000
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0.71
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568000
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0.71
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Contribution Margin
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290000
|
0.29
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348000
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0.29
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232000
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0.29
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Fixed Costs
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Salaries-Management
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20000
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0.02
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20000
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0.017
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20000
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0.025
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Salaries-Staff
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6667
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0.007
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6667
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0.006
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6667
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0.008
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Advertising
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40000
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0.04
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40000
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0.033
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40000
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0.050
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Rent
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5000
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0.005
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5000
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0.004
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5000
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0.006
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Total
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71667
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0.07
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71667
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0.06
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71667
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0.09
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Net Income
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218333
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0.22
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276333
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0.23
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160333
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0.20
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Question 1. What are breakeven sales in dollars for the month of December?
Question 2. What is the margin of safety in dollars?
Question 3. What effect would a 3 percent decrease in variable cost have on planned contribution margin?
Question 4. What effect would a 3 percent increase in selling price have on planned contribution margin?
Question 5. What if any changes would you institute and why if you would, why not if you wouldn’t?