Calculate the break-even product value of using Express Mail (overnight delivery) versus Parcel Post (three-day delivery) for sending a package from Peoria, Illinois to Memphis, Tennessee. The following table contains the appropriate costs. Assume that inventory carrying cost is 25 percent per year of the product value and that there are 365 days in a year.
weight (lbs) cost (OND) cost (3 day)
2 $15.00 $2.87
3 17.25 3.34
4 19.4 3.78
5 21.55 4.1
6 25.4 4.39
7 26.45 4.67
8 27.6 4.91
9 28.65 5.16
As I understand the question, the product is considered to be in the inventory, until it is actually delivered to the customer.
This means that the difference of 2 days in delivery of the product by two mailing options ...
Budgetings: Break-even Analysis and Planning
Budgeting is an important internal activity. Preparing budgets involve forecasting sales and estimating costs.
Prepare a flexible budget for next year for Lowe's. The budget needs to be realistic and based on corporate and economic trends.
Prepare budget based on absorption approach. Don't forget that the presentation of the information is important.
Set up the flexible budget at three levels - minimum, average and high revenues. Use the financial statements and to determine growth trends via computations.
In two pages explain the following in two plus pages:
Explain your estimates and prepare a flexible budget showing the low, the average, and the high revenues and adjust all other line items in the income statement to reflect the revised revenue assumptions.
What is the growth rate in sales for the past three years?
Are revenues and expenses growing at the same rate? What was the experience in the past few years?
What is the current growth rate in the economy?
How are the competitors doing esp. Home Depot?
Current interest rates and tax burdens.View Full Posting Details