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Contribution Margin and Breakeven Analysis
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Contribution Margin and Breakeven Analysis Learning Team B Managerial Accounting and Finance Foundations / 540 Professor George Peterson January 29, 2005 Contribution Margin and Breakeven Analysis The "Contribution Margin and Breakeven Analysis" simulation puts the student in the roll of the Chief Operating Officer (COO). The current assignment is to produce lemon cookies and mint cookies. There are four areas in this exercise: 1) breakeven analysis, 2) profit, 3) loss, and 4) indifference point. Breakeven is when total revenue is equal to total costs. When revenues are greater then total costs a profit occurs. If the reverse happens then a loss occurs. Indifference point is the point when labor costs and machine costs are equal for a process. This paper will address the student's requirements to evaluate the cookie simulation in four areas. First, when a bulk order is processed. Second, Maria wants to consider the peanut butter cookie plant. Third, explain and research...
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