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Management Accounting; Cvp

In: Business and Management

Submitted By Rushzhang
Words 380
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Bridgestone Behavioral Health Center
(Course Ebook, pp. 93-100)

Case Questions 1.* Using the budget data in Exhibit 1, determine Bridgestone’s projected weighted average contribution margin ratio for next year. Using the budget data in Exhibit 1, determine Bridgestone’s projected breakeven point for next year in terms of revenue. Using the budget data in Exhibit 1, determine the revenue that Bridgestone will expect to generate from Individual Counseling services if the company achieves the projected breakeven revenue (see item 2 above) for next year. Using the budget data in Exhibit 1, determine Bridgestone’s projected margin of safety for next year in terms of revenue and a percentage. Using the budget data in Exhibit 1, determine Bridgestone’s projected income or loss if total organization revenue is 10% higher than the projected $5,000,000. Exhibit 1 assumes a certain revenue mix among the 10 service categories (e.g., that Individual Counseling will generate 21.8% [$1,090,000/$5,000,000] of total organization revenues and that Ambulatory Detoxification will generate 10.86% [$543,000/$5,000,000] of total organization revenues). Discuss whether the projected breakeven point you computed in item 2 above would increase or decrease if budgeted organization revenue remained $5,000,000, but the assumed revenue mix was changed so that Individual Counseling generates 10.86% of revenues and Ambulatory Detoxification generates 21.8% of revenues. An important aspect of cost-volume-profit analysis is sensitivity analysis. Discuss the nature of sensitivity analysis and why it should be a part of cost-volume-profit analysis. Define the concepts “committed fixed cost” and “discretionary fixed cost.” Discuss the implications that each of these categories of fixed costs has for both short-term and longterm planning within the organization. Bridgestone is a nonprofit…...

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