Cost Analysis on Stinson Beach Fashion Case - Desklib

This presentation provides a cost analysis of Stinson Beach Fashion Case, including total fixed cost, total variable cost, contribution margin per unit, break even point, desired sales, and desired revenue. It also includes recommendations and references.

Advanced financial
accounting
COST ANALYSIS ON STINSON BEACH FASHION CASE

Introduction
The case represents about the below given aspects:
Total fixed cost
Total variable cost
Contribution margin per unit
Break even point
Desired sales
Desires revenue etc

Total Cost, contribution and BEP level
The total cost of the project is divided into the total fixed cost and total
variable cost of the business.
 Total variable cost of the project is $ 4526.
 Total fixed cost of the business is $ 7,52,000.
 The contribution margin pr unit of the company is $ 469.
 The profit after tax of the project is 375660.
 The break even units of the company are 1603.41.
 The break even dollar amount is $ 8,009,040.

Desired revenue
The case explains that the owner needs more amount in order to mange
the daily activities and position of the business.
The need of desired revenue of the business is $ 3,00,000 after all the
decisions.
On the basis of the calculations, it has been found that the 3025 units
must be sold by the business in order to meet the total profit f $
6,66,6667 which would be reduced to $ 3,00,000 after the tax
deductions.

Changes in sales price or sales units
If the changes into the sales price would be done to het the revenue of $
3,00,000 after tax than the total selling price should be improved to $
6500.
 As at this situation, the break even point f the business would be 1924
units which could be produced and sold by the business.
Further, in case of changes into the sales units:
 I the business is required to improve the sales to 3025 units.
 As at this level, the business would be able to cover all the expenses.

Recommendation and conclusion
 On the basis of the overall study on the case, it has been recommended
to the owner of the company to improve the selling price in order to
meet the desired profitability level of the business.

References:
 Chandra, P. (2011). Financial management. Tata McGraw-Hill Education.
 Higgins, R. C. (2012). Analysis for marketing management. McGraw-
Hill/Irwin.
 Madura, J. (2011). International financial management. Cengage
Learning.