Transcript
Case Study
Prestige Telephone Co.
CLASSIFICATION OF COSTS
Fixed costs:
Space rent
Custodial services
Computer leases
Maintenance
Depreciation
Power
Wages:
Operations
Systems development
Admnistration
Sales
Sales promotions
Total fixed costs I
Corporate services
Total fixed costs II
Jan
Feb
Mar
Average
8.000
1.240
95.000
5.400
26.180
8.000
1.240
95.000
5.400
26.180
8.000
1.240
95.000
5.400
26.180
8.000
1.240
95.000
5.400
26.180
181
12.000
9.000
11.200
7.909
12.000
9.000
11.200
7.039
12.000
9.000
11.200
8.083
Variable cost per hour:
Power
Wages operations
Materials
Variable unit cost per hour
24.898
12.000
9.000
11.200
7.677
200.776
15.236
216.012
4,04
20,10
25,28
49,42
VARIABLE INCOME STATEMENT
%
Revenue:
Intracompany
Commercial
Other
Revenue
Variable costs
Contribution margin
Fixed costs
Net income (loss)
Rounding error
@ João C. Neves, ISEG Lisbon, 2004
Price
Volume
Total
400
800
223
138
89.200
110.400
12.685
212.285
17.841
194.444
216.012
(21.568)
(130)
6,36%
361
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Case Study
Prestige Telephone Co.
BREAK-EVEN ANALYSIS
Including Without corp.
Corp.Services
Services
Fixed cost to be covered by commercial sales:
Fixed costs
Other fixed revenues
Contribution by intracompany sales
Fixed costs to be covered by commercial sales
Real No. Of commercial hours
Contribution margin per hour of commercial sales:
Price
Variable cost
Contribution margin per hour of commercial sales
Break-even of commercial sales:
No. Hours
Revenue
Safety margin
Cash Breakeven
216.012
12.685
78.179
125.148
200.776
12.685
78.179
109.912
189.832
12.685
78.179
98.968
138
138
138
800,00
49,42
750,58
800,00
49,42
750,58
800,00
49,42
750,58
167
133.600
146
116.800
132
105.600
21,0%
5,8%
-4,3%
a)
1000
-30%
96,6
950,58
91.826
103.580
-11.754
b)
600
30%
179,4
550,58
98.774
103.580
-4.806
c)
800,00
30%
179,4
750,58
134.654
Responses to questions:
Change price to
Variance on demand %
New demand in No. Hours
New unit contribution margin
New contribution margin
Previous contribution margin
Incremental benefit
Actual fixed costs
Allowed increase in promotion
d) Reduce to 16 hours in weekdays
What are the savings?
Basically personnel expenses in operations
How much?
There is an incremental loss
@ João C. Neves, ISEG Lisbon, 2004
d)
800,00
-20%
110,4
800,00
88.320
103.580
-15.260
125.148
9.506
33%
8.299
-6.961
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