A.

Doyle's Candy Company BEP = Fixed Costs/Unit Contribution

= $1.056.000/$9.60-$5.76 Selling Price/Unit (UR) =
= 275,000 Boxes Variabel Cost/Unit (UVC):
Candy Production
B. Contribution Margin Percentage (CMP) = UR-UVC/UR Selling Expense
= $9,60-$5,76/$9,60
= 40%

15% Increase variable cost =

UVC = $ 6.48 KELOMPOK 2
UR = UVC/1-CMP RIANDY AR RASYID
UR = $ 10.80 SISPA NURADIANA
FAISAL ARSYA R.
C. Projected Statement of Profit & Loss
Revenue $ 3,744,000
Variable Cost $ 2,527,200
Contribution $ 1,216,800
Fixed Costs $ 1,056,000
EBT $ 160,800
Tax (30%) $ 48,240
EAT $ 112,560

EBT' = (UR-UVC) * X - $1.056.000

$104.640 = ($9,60-$6,48) * X - $1.056.000
$3,12 * X = $ 1,216,800
X= 390,000 Boxes
TR = $ 3,744,000
ice/Unit (UR) = $ 9,60
Cost/Unit (UVC):
4.8 5.52
0.96 0.96
5.76 6.48

1706131875
1706131944
1706131635
Prestige Data Services Summary of Computer Utilization, First Quarter 1997
Revenue Hours January February March
Intercompany 206 181 223
Commercial 123 135 138
Total revenue hours 329 316 361

Service Hours 32 32 40
Available Hours 175 188 167
Total Hours 536 536 568

Prestige Data Services Summary Results of Operations, First Quarter 1997

Revenues:
Intercompany sales 82,400 72,400 89,200
Commercial Sales
Computer use 98,400 108,000 110,400
Other 9,241 9,184 12,685
Total revenue 190,041 189,584 212,285

Expenses
Space Costs
Rent 8,000 8,000 8,000
Custodial services 1,240 1,240 1,240
Total costs 9,240 9,240 9,240

Equipment costs:
Computer leases 95,000 95,000 95,000
Maintenance 5,400 5,400 5,400
Depreciation
Computer equipment 25,500 25,500 25,500
Office equipment and fixtures 680 680 680
Power 1,633 1,592 1,803
Total costs 128,213 128,172 128,383

Wages and Salaries

Operations 29,496 29,184 30,264
Systems development and maintenance 12,000 12,000 12,000
Administration 9,000 9,000 9,000
Sales 11,200 11,200 11,200
Total wages and salaries 61,696 61,384 62,464

Materials 9,031 8,731 10,317

Sales Promotions 7,909 7,039 8,083
Corporate Services 15,424 15,359 15,236
Total Expenses 231,513 229,925 233,723
Net Income (loss) - 41,472 - 40,341 - 21,438

Answers:
1
Variable costs are the only costs that should be considered when making decisions. It is also
important to look at the opportunity cost of the leases for the computer equipment, which had
four years left and are noncancelable. The purpose of the company was to provide a step
towards deregulation and would decrease the need for a rate increase. Also if they shut down
Data Services they would have to pay an outside company to provide this service to Prestige
Telephone Company along with lose the revenue from the commercial sales. In regards to the
space that Prestige Data uses, they could potentially rent the out the space to an outside
company. There would also be a benefit to laying the personnel off and not having to pay those
wages and salaries. However, we came to the conclusion that Prestige Data Services is more of a
benefit than Rowe initially thought and should be given more time to show its contribution since
the loss is actually decreasing at march.

2 Break Even Point = Total Cost = Total Revenue

a. Total Cost = Fixed cost + Variable cost
Fixed cost = 200,396
Variable cost = 4.53α + 80.13α

b. Total revenue = Intercompany revenue + Commercial revenue

Intercompany revenue 82,000
Commercial revenue = 800 x α
c. Total revenue = Total cost
200,296 + 4.53α + 80.13α = 82,000 + 800α
Hence, it will be found that α = 165.37 hours

3 a. Net income = Total revenue - Total cost

the changes in price and demand of commercial service will only
affect revenue and variable cost, hence the effect will be:
Contribution margin = (97 x 1000) - (97 x 4.53) - (97 x 80.13)
Contribution = 88,421.90
Compared to the present contribution:
Contirbution = (138 x 800) - (138 x 4.53) - (138 x 80.13)
Contribution = 98,716.99

Therefore, it'd be wiser if the price of commercial service stayed

at $800/hour because the demand elasticity is elastic.

b. Contribution = (180 x 600) - (180 x 4.53) - (180 x 80.13)

Contribution = 92,452.09
The contribution is still less than the present contribution, hence it's better to keep the prce at $800/hour

c. The plan would increase the demand 30%, therefore the commercial hours will be 180 hours.
Contribution = (180 x 800) - (180 x 4.53) - (180 x 80.13)
 Contribution = ###
Compared to the present
Contribution = 98,716.99
Difference = 29,615.10
Therefore, the promotion increase plan could use 29,615.10 at most so there won't be loss in net income

d. Reducing hours would reduce demand for commercial revenue hours by 20%, from 138 hours to 110 hou
Contribution = (110 x 800) - (110 x 4.53) - (110 x 80.13)
Contribution = 78,973.60
Compared to present
Contribution = 98,716.99
Difference = - 19,743.40
The reduction of commercial hours services would cause the loss of contributional margin at 19,743.4

4 a. Prestige Data Service should show in the Financial Report which one is fixed cost and variable cost.
b. PDS should identified the other revenue in details.
For number 2 For numberFor numberfor numberfor number 3.d
205 223 223 223 223
166 α 97 179.40 179.40 110.40
371 320 402.40 402.40 333.40

82,000

132,800

214,800

8,000
1,240
9,240

95,000
5,400

25,500
680
Average Power cost 4.530
per hour =

Operations wages 80.13

12,000 per hour =
9,000
11,200

9,360
7,677
15,340 Fixed cost (assume that
200,396 materials, sales promotions,
 materials, sales promotions,
200,396 and corporate service will be
the same)

Additional data:
400 Price for Intercompany services
800 Price for commercial services

to keep the prce at $800/hour.

will be 180 hours.

re won't be loss in net income.

%, from 138 hours to 110 hours.

utional margin at 19,743.4

d cost and variable cost.