SPMA 3P27 - Final Exam WITH 100- CORRECT ANSWERS
= total fixed expenses / weighted avg selling price - weighted average variable
expenses - ✔✔ANSWER✔✔>>Breakeven Point
After tax profit/ (1- tax rate) - ✔✔ANSWER✔✔>>After Tax Formula
Contribution per unit / selling price per unit - ✔✔ANSWER✔✔>>Contribution Margin
Ratio Formula
Selling price per unit - variable cost per unit - ✔✔ANSWER✔✔>>Contribution Margin
Formula
Difference between selling price per unit and the variable cost per unit -
✔✔ANSWER✔✔>>Contribution Margin
Provides insights for effective planning, budgeting, and decision making -
✔✔ANSWER✔✔>>CPV (Cost Volume Profit)
Total costs and revenue - ✔✔ANSWER✔✔>>Breakeven Point
= (your average price - average price)/average price - ✔✔ANSWER✔✔>>Premium and
Discount Price Formula
would be a positive number - ✔✔ANSWER✔✔>>Premium
would be a negative number - ✔✔ANSWER✔✔>>DIscount
What is the minimum price you would charge as a company with $15,000 in variable
costs, $18,000 in Fixed Costs, and a desire for $8,000 in contingencies (i.e. owner
salary), assuming you produce 800 units per year? - ✔✔ANSWER✔✔>>$51.25
What are examples of M&A? - ✔✔ANSWER✔✔>>Google bought Fitbit, WWE
purchased UFC, Bass Pro Shops bought Cabelas
What is M&A? - ✔✔ANSWER✔✔>>The assets of two companies are brought together
for one company - one of the two original companies or a newly formed company
What is a vertical classification? - ✔✔ANSWER✔✔>>When one firm acquires another
in the supply chain
Ex. Nike acquired rubber band company for shoe product
, What is a horizontal classification? - ✔✔ANSWER✔✔>>When two firms in the same
industry are combined Ex. Adidas and Reebok
What is a conglomerate classification? - ✔✔ANSWER✔✔>>When two firms in
unrelated business combine
Ex. Ontario teachers pension had majority share in MLSE
What are Porter's Five Forces? - ✔✔ANSWER✔✔>>1. Buyer Power
2. Supplier Power
3. Threat of substitute products or services
4. Threat of new entrants
5. Rivalry among existing competitors
When is intensity greatest? - ✔✔ANSWER✔✔>>Competitors are similar in size
Growth is slow
Exit barriers are high
Highly committed to the business and have high aspirations for leadership in the
industry
Firms can't read each other's signals well
Which option do you choose when dealing with multiple products in M&A -
✔✔ANSWER✔✔>>Option with highest contribution rate
What is the cost-volume-profit (CVP) analysis? - ✔✔ANSWER✔✔>>Provides insights
for effective planning, budgeting, and decision making
units sold x selling price per unit - ✔✔ANSWER✔✔>>Sales Budget Formula
(Total # of products produced in the quarter) x (hourly wage x hour per unit) -
✔✔ANSWER✔✔>>Direct Labour Cost Formula
What are the three key uses of a budget - ✔✔ANSWER✔✔>>Forecasting, planning,
controlling
Name three of the advantages of budgeting - ✔✔ANSWER✔✔>>Define goals and
objectives
Think about and formally plan the future
Means of allocating resources
Uncover potential benefits
Serves as benchmark for assessing results
Communicating plans
Cost of investment / by annual net cash inflow or savings
Divided final two digits by 52 to get weeks - ✔✔ANSWER✔✔>>Payback Method
= total fixed expenses / weighted avg selling price - weighted average variable
expenses - ✔✔ANSWER✔✔>>Breakeven Point
After tax profit/ (1- tax rate) - ✔✔ANSWER✔✔>>After Tax Formula
Contribution per unit / selling price per unit - ✔✔ANSWER✔✔>>Contribution Margin
Ratio Formula
Selling price per unit - variable cost per unit - ✔✔ANSWER✔✔>>Contribution Margin
Formula
Difference between selling price per unit and the variable cost per unit -
✔✔ANSWER✔✔>>Contribution Margin
Provides insights for effective planning, budgeting, and decision making -
✔✔ANSWER✔✔>>CPV (Cost Volume Profit)
Total costs and revenue - ✔✔ANSWER✔✔>>Breakeven Point
= (your average price - average price)/average price - ✔✔ANSWER✔✔>>Premium and
Discount Price Formula
would be a positive number - ✔✔ANSWER✔✔>>Premium
would be a negative number - ✔✔ANSWER✔✔>>DIscount
What is the minimum price you would charge as a company with $15,000 in variable
costs, $18,000 in Fixed Costs, and a desire for $8,000 in contingencies (i.e. owner
salary), assuming you produce 800 units per year? - ✔✔ANSWER✔✔>>$51.25
What are examples of M&A? - ✔✔ANSWER✔✔>>Google bought Fitbit, WWE
purchased UFC, Bass Pro Shops bought Cabelas
What is M&A? - ✔✔ANSWER✔✔>>The assets of two companies are brought together
for one company - one of the two original companies or a newly formed company
What is a vertical classification? - ✔✔ANSWER✔✔>>When one firm acquires another
in the supply chain
Ex. Nike acquired rubber band company for shoe product
, What is a horizontal classification? - ✔✔ANSWER✔✔>>When two firms in the same
industry are combined Ex. Adidas and Reebok
What is a conglomerate classification? - ✔✔ANSWER✔✔>>When two firms in
unrelated business combine
Ex. Ontario teachers pension had majority share in MLSE
What are Porter's Five Forces? - ✔✔ANSWER✔✔>>1. Buyer Power
2. Supplier Power
3. Threat of substitute products or services
4. Threat of new entrants
5. Rivalry among existing competitors
When is intensity greatest? - ✔✔ANSWER✔✔>>Competitors are similar in size
Growth is slow
Exit barriers are high
Highly committed to the business and have high aspirations for leadership in the
industry
Firms can't read each other's signals well
Which option do you choose when dealing with multiple products in M&A -
✔✔ANSWER✔✔>>Option with highest contribution rate
What is the cost-volume-profit (CVP) analysis? - ✔✔ANSWER✔✔>>Provides insights
for effective planning, budgeting, and decision making
units sold x selling price per unit - ✔✔ANSWER✔✔>>Sales Budget Formula
(Total # of products produced in the quarter) x (hourly wage x hour per unit) -
✔✔ANSWER✔✔>>Direct Labour Cost Formula
What are the three key uses of a budget - ✔✔ANSWER✔✔>>Forecasting, planning,
controlling
Name three of the advantages of budgeting - ✔✔ANSWER✔✔>>Define goals and
objectives
Think about and formally plan the future
Means of allocating resources
Uncover potential benefits
Serves as benchmark for assessing results
Communicating plans
Cost of investment / by annual net cash inflow or savings
Divided final two digits by 52 to get weeks - ✔✔ANSWER✔✔>>Payback Method
