StudentShare solutions
Triangle menu

Simulation - Essay Example

Not dowloaded yet

Extract of sample
Simulation

Now the application of cost accounting system came into practices for the fact that that the firm had to come up with a decision i.e. whether to accept this order or otherwise, since bulk orders go for discounted prices, but the exceptional quantity makes the fixed cost distribute over larger volumes.
Number cracking leads to the conclusion that the contribution margin and operating profits from lemon cookies are lesser when compared to the real mint ones. So the suggestion came out was to reduce the volume of lemon ones and increase those of real mint, as it would also accommodate the order.
In realistic terms, the application should be otherwise, since the unit contribution margin for lemon cookies is on the higher side. At the same time, any order cannot be accepted at a point in time when production capacity is already on maximum utilization point, since it implies the inability of the firm to cater to the order. Along the similar line, the order should not also be considered because the selling price per unit for the bulk order is the one at which contribution margin is less than the fixed costs incurred so it makes less sense to accept the order under such a circumstance despite the fact that the contribution margin would yet be greater than zero, but would result in a loss for the business. Subsequently, it doesn't turn out to be worth for fulfilling the order.

Some more facts reveal that the break-even point for the lemon cookies is around 563,000 packs. The current manufacturing is around 600,000 packs, which turns the cycle into a profitable one, as it goes beyond the breakeven, and this manufacturing is around the same marks as the production requirements and monthly targets. However, increasing the break-even volume to 650,000, would not be profitable, despite the firm bring in operating profits. Though in doing this, the existing unit may be forced to reduce its volumes for lemon cookies, as the variable cost per unit for lemon is on the higher side.

These were some outcome from the simulation conducted, however, the three major learning points were the taking up of key figures of fixed costs, variable costs and breakeven point. These are the major constituents of cost for running a business. Majority of the costs are easily observable and thus, can be quantified to ensure that their relationship with the level of output can be determined in direct form or otherwise (Costs, 2005, para. 1 and 2).

Fixed and Variable costs are the basic bifurcation or classification of costs in a business, while break-even point determines the zero profit/loss levels and beyond this point, is all the profit a firm earns from its operations. Fixed costs remain same irrespective of the volume of output, while variable costs vary with the level of output produced (Marshall, McManus and Viele, 2004, pg. 417). There is another category of costing referred to as mixed cost, and this is a form that contains elements of both fixed and variable costs. The most classical examples are bills that contain a line rent (fixed part) and a unit based rental (variable part).

The analyses of all these costs are done ...Show more

Summary

Aunt Connie's Cookies is the name of the brand that is known to be found similar in meaning to some delicious food, in particular the lemon and real mint cookies flavor, in areas wherever it exists today. Maria Villanueva. This is the family own business, initiated by Connie Rochoa, and the current CEO I her grand-niece Maria Villanueva…
Author : urielblanda
Simulation essay example
Read Text Preview
Save Your Time for More Important Things
Let us write or edit the essay on your topic
"Simulation"
with a personal 20% discount.
Grab the best paper

Related Essays

Simulation
The main purpose of applying simulation for any project to is to reduce the risk of the problems that the new system may bring about to the entire project and may bring the entire business to a standstill because the new operation was not tested beforehand.
4 pages (1000 words) Essay
Simulation
In nursing these functions are achieved through a combined application aspects of role playing, use of low and high technology equipment, and application of real field work activities. The literature available concerning simulation in nursing is mostly inclined towards simulation done for the purpose of education.
4 pages (1000 words) Essay
Business Simulation
Reflexive essay on business simulation Name: Course: Institution: Tutor name: April 9, 2013 Reflexive essay on business simulation Introduction Simulations offer an experience of a real set up and therefore test on properties that are expected among individuals.
6 pages (1500 words) Essay
Simulation technology
The magnificence of simulation technology is that organizations can test different 'untidy heaps' of aspects prior to making any final judgment and comprehend the impact of different aspects such as time. The reason why simulation technology is being seen as an effective management tools because simulation lets front position employees, discipline practiced and decision-makers to have grand ideas, and with right form of technology to explore how their plans would operate actually prior to making final judgments.
6 pages (1500 words) Essay
Workplace simulation
That is HRIS, HR intranets and HRMS. As a part of the HR department, it is the job of the author to formulate and employ the simulation. Riordan manufacturing Inc is a successful company that was established in 1991. It has expanded its operations from a research and development company to plastic manufacturing company.
9 pages (2250 words) Essay
Simulation
s employees to specific project teams when special projects are contracted and then reassigns them back to the organization once the project is completed (Answers, 2009). The organization that regulates and sets standards for the profession is the Project Management Institute.
4 pages (1000 words) Essay
Capstone simulation
The main aim of this strategy is to bring a complete change to poor performing companies by ensuring customer satisfaction and production of cheaper products. While carrying out strategic planning there are
2 pages (500 words) Essay
SIMULATION REFECTION
Based on these readings, I gave him the Lasix that was ordered by the physician because I knew that this medication would help the patient to get out rid of fluid accumulation. Consequently, patient was able to breathe easier and his blood
3 pages (750 words) Essay
Simulation plan
The result was obtained since the problem that lay in lack of departmental integration, caused by VP technology manger, Jennifer Smith. Most actions moves are related to
2 pages (500 words) Essay
Simulation paper
Besides, they are involved in offering services to households, information technology, monetary management, and in businesses in well-developed markets in the region (Burkhard Stiller, 2010). Our principal aim is to come up with an achievable marketing routine that
5 pages (1250 words) Essay
Get a custom paper written
by a pro under your requirements!
Win a special DISCOUNT!
Put in your e-mail and click the button with your lucky finger
Your email
YOUR PRIZE:
Apply my DISCOUNT
Comments (0)
Rate this paper:
Thank you! Your comment has been sent and will be posted after moderation