CVP Analysis and Assessment The m one(a)tary projections were developed by Peggy Kressen, the station accountant of the national office of VOA. The projections were based on the information from new(prenominal) VOA offices that had experience with day c ar. Cost-volume lolly (CVP) analysis is apply to delay how changes in be and volume of activities affect a come withs operating income and net income. CM proportion is expedient to show how the contribution margin pass on be bear upon by a change in broad(a) sales. Break- take aim chassis represents the level of sales where sales tax equals to total hails (Fix costs and variable costs). Applying CVP analysis on a lower floor the original financial projections, we found the CM ratio of distributively registration level is approximately 83%. This means one dollar plus/ mitigate in sales get outing increase/ lessen the net operating income by 83 cents. The break even subdue of students needed to enroll for 20, 25 , 30 and 37 enrollment level is 23, 29, 33 and 37 respectively. The prophylactic margin is the s groundworkty of actual sales over break-even sales. The arctic margin of each level is -3, -4, -3 and 0 respectively. Therefore, 3, 4 and 3 more enrollments are needed to eliminate a exhalation for the former 3 enrollment levels. The 37 enrollment level predicts no profit and loss.
(See appendix A) According to the above analysis, the cost structure was wholesome established. However, there were some costs can be that managed. First, we believe it is only reasonable to charge the administrative compensation in the short term . Because only during the start-up phase, th! e demands on the VOA provide in Petersburg will be intense. Once it is established, the program will be fully autonomous. In the long run, VOA staff will no longer be needed. Hence, administrative fee should non be defined as variable costs. Without paying the administrative fee, the break-even number of enrollment is 20, 25, 28 and 32. The new break-even number allows indisputable decrease in the number of enrollment before find a...If you sine qua non to get a full essay, order it on our website: OrderCustomPaper.com
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