New Product Development Accounting Project Math Problem

New Product Development Accounting Project - Math Problem Example Operating Profit $152,124,000 $2,112.83 *COMPUTATIONS FOR INCOME STATEMENT Sales = Total sales units * Total per unit sale = 72000 * 14,500 = $1,044,000,000 Total Variable Expenses = Variable cost per unit * Total sales units = 8,770.5* 72000 = $631,476,000 BREAK EVEN ANALYSIS Number of Sales Units for Break Even: Break Even Sales Units = Fixed Cost Price - Variable Cost per unit = 260,400,000 5729.5 = 45,449 units. Sales Volume In Dollars for Break Even Total Sales = Total break even units * Total sales units = 45,449 * 14,500 = $659,010,500 Profit if the Sales is 6000 Units Per Month Sales per year = 6000*12 = 72000 units Profit per month = $152,124,000 Sales per month = 6000 units Profit per month = 152,124,000 / 12 = $12,677,000 Required 3: Based on the contribution income statement, the operating leverage ratio and margin of safety are calculated below: OPERATING LEVERAGE RATIO: The formula to compute the operating leverage ratio is: Operating Leverage = Contribution Margin/Net Income = $412,524,000/152,124,000 = 2.71 Operating leverage indicates what change in net income can be expected from a change in sales volume. An operating leverage of 2.7 implies that the change in net income will be 2.7 times as large as the change in sales volume. Therefore, for the projected profitability of Water Play Inc. that if sales increased by 10%, net income should increase by 27%. The net income of Water Play Inc. would be 2.7 times greater than its sales volume. MARGIN OF SAFETY: The margin of safety is measured in either dollars or units. It measures... This would be a discretionary cost for the company as the cost on research and development arises form management decision to spend a particular amount and management can reduce it in the short term if it is needed. The management can minimize this cost by delaying for short term, the unnecessary maintenance and repair expenses in the office. Reduction in these costs does not cause an irreparable loss to the company's operations. Operating leverage indicates what change in net income can be expected from a change in sales volume. An operating leverage of 2.7 implies that the change in net income will be 2.7 times as large as the change in sales volume. Therefore, for the projected profitability of Water Play Inc. that if sales increased by 10%, net income should increase by 27%. The net income of Water Play Inc. would be 2.7 times greater than its sales volume. Margin of safety reveals the amount by which actual sales can drop before a firm will incur Loss. The larger the margin: the lesser the risk. (Sales can fall by a larger percentage before the company will show a loss.). The Margin of safety or Safety stock of Water Play Inc. is 26,551 units. It means that the company should maintain 26,551 units as safety stock in order to avoid the risk.

Five Effective Leadership Qualities Assignment Example | Topics and Well Written Essays - 1500 words

Five Effective Leadership Qualities - Assignment Example Lastly, a leader can only be regarded as effective if he/she is able to achieve the organizational aims and objectives. In order to become an effective leader and influence others, an individual requires certain leadership qualities including the quality of being courageous, emotionally intelligent, and able to motivate others, open to challenges and a sound communicator. Body Courage is defined as an individual’s ability as well as willingness to counter fear and taking steps that may seem difficult. Courage is one of the most important qualities a leader should possess as courage is the quality that helps a leader in conducting most of his/her task. A leader is required to perform various activities such as taking risks, getting involved in unknown scenarios, communicating a positive vision of change to followers and without the quality of courage a leader cannot perform any one of these tasks. Any individual can perform tasks and make decisions that are taken on routinely basis and that comply with the culture of an organization. But a leader is one who has the courage to face unforeseen circumstances and take decisions that are novice. A leader has to show courage as a tool to motivate his/her followers because it is the followers who look up to their leaders and if they fail to spot courage in their leader, they will be de-motivated. Winston C hurchill is highly regarded for being a courageous leader. He once stated that that courage is the quality due to which an individual is able to stand up and speak for him and for others and it is this quality that enables an individual to take retaliation and face criticism in a positive manner (Warrell, 2013, p.92). Churchill is highly renowned for being a person who had the quality of moral courage as he knew what should be done in a particular scenario, but due to his moral courage he chose to perform activities that are morally correct. Another key quality that individuals need to possess in order to become effective leader is emotional intelligence. Emotional intelligence is a quality that an individual is said to possess when he/she has the ability to not only be aware of his/her own emotions, they should even be aware of emotions experienced by others and he/she should have the ability of controlling emotions and responding to the emotional issues experienced by others. In c ase of leadership, an emotionally intelligent leader is one who recognizes his/her own emotions and can control those emotions while making decisions and the leader even needs to be aware about the emotional issues experienced by followers in order to help solve those issues in order to motivate followers. According to a research conducting by Bommer during the period of 2005, an emotionally intelligent leader has the ability to positively change the attitudes and behaviors of other individuals. Emotional intelligence is qualities that can help leaders conduct various tasks that are required of him (Ciulla, 2008, p.88). A leader is expected to be a conflict resolver in conflicts that arise between lower level of employees and conflicts that arise within the employees who work at the same level. Emotional intelligence can help leaders identify the grievances that employees of the lower level of the organization have with the decision making level of employee