Pittman Company

In: Business and Management

Submitted By fbasis
Words 372
Pages 2
1. A. The break-even point is $12,000,000 B. The break-even point is $13,714,286 C.The break-even point is $15,157,895
2 If the company wanted to generate the same net income as contained in the budgeted income statement while paying a commission of 20% they would have to have sales totaling $17,142,857.
Pittman Company
Contribution Income statement
For the month of
Total
Cm Ratio
Sales
$17,142,857
100%
Less: Variable expense
$11,142,857
65%
Contribution margins
$6,000,000
35%
Less: Fixed cost
$4,800,000
Net operating income
$1,200,000
3 If the company wanted to generate the same net income as contained in the budgeted income statement, while paying no commission and hire no sales force, they would have to generate sales of $10,909,091 to generate a profit of $1,200,000.
Pittman Company
Contribution Income statement
For the month of
Total
Cm Ratio
Sales
$10,909,091
100%
Less: Variable expense
$4,909,091
45%
Contribution margins
$6,000,000
55%
Less: Fixed cost
$4,800,000
Net operating income
$1,200,000
4.
A. Operating leverage is 4
B Operating leverage is 7
C. Operating leverage is 19
5 If the company decides to stay the course and continue to pay a commission of 15% this will allow them to operate with the lowest possible break even point. While a 20% commission will put the break-even point at the highest level of the three scenarios. However if the company decides to stay the course they will have a relatively low operating leverage and will need a substantial increase in sales to increase profit. The best choice is for the company to drop the outside sales force and hire an internal sales team. An internal sales team would have a break-even point higher than the status quo but lower than with a 20% increase in sales commission. Also another key selling…...

Similar Documents

Accounting Pittman Company Is a Small but Growing Manufacturer of Telecommunications Equipment.

...How long has Agel been in business? Agel Enterprises, LLC was incorporated in March of 2005. The first products shipped in May, 2005. Is there an age requirement to become an Agel team member? You must be at least 18 years of age to participate as an Agel Team Member. The color in the gels is a result of the natural color of the ingredients. We recommend that you consult with your physician before consuming multiple Agel products on the same day. All of the ingredients in the Agel products come from natural sources except the preservative Sodium Benzoate and the synthetic Taurine found in OHM. Synthetic Taurine is preferred over natural Taurine because natural Taurine is derived from bile. In order to be sensitive to all Agel team members’ varying religious beliefs, the synthetic source was chosen. Some of the most commonly queried active ingredients include: Aronia comes from Europe and N. America Acerola comes from S. America Elderberry comes from N. America and Europe Noni comes from the Tropics Gac comes from S.E. Asia Mangosteen comes from S.E. Asia Acai comes from the Amazon Glucosamine comes from shellfish Chondroitin is Bovine sourced Celadrin is Bovine sourced Taurine is synthetic Ribose is created through a fermentation process, using a glucose starting point Rhodiola comes from Russia and Asia Agel FIT FIT compliments your weight control program, along with eating right and exercising. That’s because it contains a patented natural......

Words: 445 - Pages: 2

Be Company

...income statements, balance sheets, and cash budgets based on sales increases of 500 units per month and 30-day advanced production for January through September. See attached income statements, balance sheets and cash budgets. When will the company need extra funds? How much will be needed? When can a short-term loan to cover the need be repaid? The company needs extra funds in April to keep from going into a negative bank balance by the end of April. If nothing changes the ending bank balance for April will be -$2500. A short term loan of $2500 will allow the company to continue operating through April. Unfortunately if nothing changes, they will need another short term loan of $25000 to operate through May, $37500 to operate through June, $40000 to operate through July, and $32500 to operate through August. If the business plan is not changed or customers made to pay within the net 30 terms, a short term loan cannot be repaid with the current sales and production schedule. 2. How is it possible that a company starts with $250,000 in capital and has profitable sales for a period of six months and still ends up with a zero bank balance? Why did Medieval Adventures need money in April? How could this need have been avoided? The company runs out of cash because the aggressive growth schedule cannot be sustained while the customers are allowed to pay invoiced 30 days late. Medieval Adventures needs money in April because the cost to produce the June inventory. Aaron......

Words: 1247 - Pages: 5

Chris Pittman

...Chris Raub Professor Okine Constitutional Law 4/29/14 Christopher Pittman was 12 years old when he fatally shot both of his grandparents, just before setting fire to their house. He was intoxicated with antidepressants. After running away one night, state troopers picked him up and took him to an institutional facility for troubled kids. Whilst there, he was first prescribed Paxil for mild depression. When taken out of the facility by family members, he was taken to his grandparents, in the hope that the new atmosphere would help him. He was immediately taken off of Paxil by a new doctor, without a weaning process, and was prescribed Zoloft. Chris began to complain about side effects, including a burning sensation under his skin and difficulty sleeping. Instead of removing the new medication, the doctor doubled his dosage. Five days later, Chris committed the double murder. The doctor was never charged for malpractice, or his involvement in the murders. Instead, Chris was arrested, imprisoned for three years prior to his trial, tried in an adult court at age 15, found guilty of murder, and sentenced to 30 years imprisonment. His right to a speedy trial, as guaranteed by the Sixth Amendment, was ignored. No reasonable person would consider holding a 12-year-old for three years awaiting trial as constitutional. For that reason alone, the court should have let Chris go, and in less corrupt times, it would have. However, it was much easier for prosecutors to......

Words: 544 - Pages: 3

Company

...5/8/2014 Most important document in constitution of a company is Memorandum | Law Teacher Need help? ☎ 0115 966 7966 Enter your search terms... Search Home Services Prices Order Quality About Us Law Help Contact Us My Account You are here: Law Teacher » Company Law » Essays » Most Important Document In Constitution Of A Company Is Memorandum Of Association Company Law Essay Most important document in constitution of a company is Memorandum Search all our free law essays... These essays have been written by students for you to use to help you with your studies. If you need your own custom law essay then we can help.... Get a quote for your own law essay... 0 Translate this page Select Language ​ ▼ Order Your Law Essay Search Share & Download Like 0 Print Download Email Order your custom law essay today to help you achieve the grade you need. Tw eet 0 Order Now Introduction The most important document in the constitution of a company is the Memorandum of Association of the company. The Articles of Association is the second most important document that needs to be registered by any company for its incorporation, registration and subsequent operation. It is a public document laying down the rules for the internal management of the company and it does not have the force of ‘law’. The provisions of the article amount to public notice, known as constructive notice. This is the doctrine of constructive notice.......

Words: 2872 - Pages: 12

Company

...incorporation is the creation of two independent bodies; the company and its membership. The membership of a limited company takes shares in a company. The shares held represent a member’s interest in the company. The nature and extent of this interest will determine the member’s right to participate in dividend payments as well as a member’s right to participate in the decision making policy of the company. Subject to any prohibition contained in the company’s constitution, a shareholder may freely sell or dispose of his shareholding interest. In respect of the company’s existence, it is quite irrelevant that the identity of its shareholder may change. A company’s legal existence is not dependent upon the survival of individual shareholders. Accordingly, a company is said to have perpetual succession. Although one person may in effect control and execute the affairs of a company by occupying several positions in the corporate structure – for example, an individual may be the majority shareholder, the company’s managing director and at the same time the company’s sole employee – such a person is not regarded as the company. The company has a separate legal entity. While a company holds its property and assets for the ultimate benefit of the associated tights of its membership, a member of a company may still be convicted A company’s board of directors is comprised of the individually appointed directors of the company. The board is the ultimate decision-making body and......

Words: 313 - Pages: 2

Accounting Pittman Company

...Background Pittman Company is a small but growing manufacturer of telecommunications equipment. The company has no sales force of its own; rather, it relies completely on independent sales agents to market its products. These agents are paid a commission of 15% of selling price for all items sold. Barbara Cheney, Pittman's controller, has just prepared the company's budgeted income statement for next year. The statement follows: Table- 1 As Barbara handed the statement to Karl Vecci, Pittman's president, she commented, “I went ahead and used the agents' 15% commission 1 rate in completing these statements, but we've just learned that they refuse to handle our products next year unless we increase the commission rate to 20%.” “That's the last straw,” Karl replied angrily. “Those agents have been demanding more and more, and this time they've gone too far. How can they possibly defend a 20% commission rate?” “They claim that after paying for advertising, travel, and the other costs of promotion, there's nothing left over for profit,” replied Barbara. “I say it's just plain robbery,” retorted Karl. “And I also say it's time we dumped those guys and got our own sales force. Can you get your people to work up some cost figures for us to look at?” “We've already worked them up,” said Barbara. “Several companies we know about pay a 7.5% commission to their own salespeople, along with a small salary. Of course, we would have to handle all promotion costs, too. We figure......

Words: 684 - Pages: 3

Company

...visible part of ethics of an organization and has a core values. The field of responsible business practice is one of the most speedily budding corporate today. Now companies have to build shareholder value while harmonizing the increasing, ethical, social and environmental expectation of the society. In a nutshell, today companies have to make profits with principle, which will ultimately need companies to be more transparent. There is a consciousness that being responsible can actually be good for a company’s reputation and for a business. CSR particles in Bangladesh A socially responsible business environment is as much needed in Bangladesh as anywhere else. It’s really needed in a developing country like Bangladesh. In developing country, where social institution are still surfacing the corporate entities have to show more commitment. There are a lot of reason shows that CSR practices in Bangladesh must need to growing awareness and should emphasis. There, of course, was all old concept of CSR. But in Bangladesh this is changing, but not as fast as it is changing in other countries. Businesses now understand that social commitment brings recognition. All companies need to consider their CSR for two basic reasons. Firstly, because there is increasing pressure from all stake holders to do so. Any company that does not enlarge and promote its CSR policy to all its stakeholders will face increasing threats to its reputation. Secondly, become it makes a......

Words: 2122 - Pages: 9

Christopher Pittman Verdict Opinion

...Christopher Pittman from the state of South Carolina on February 15, 2005 shot his two grandparents using his father’s shotgun while they lay on their beds, he then set the house on fire, drove his grandparents truck and fled with cash and weapons in his possession. The petitioner, Pittman was only 12 years of age when he committed this malicious acts. He was charged with premeditated murder and put on an adult court for trial. Christopher Pittman’s defense team claimed that young Christopher Pittman remained an innocent child because he still could not differentiate what was right or wrong while under influence of Zoloft, an antidepressant. The defense urged the court to consider Pitman a child thus unable to plan and execute premeditated murder as an adult will do. The defense urged the judges to consider an equivalent reaction of a juvenile actions of such magnitude by sending him to a juvenile system where he will be able to get psychiatric treatment alongside rehabilitation and not retributions. However, the prosecutor’s side argued that Christopher Pittman was “diabolical” in arranging the murder and did not regret subjecting Pittman to an adult trial. The prosecutor argued that since Pittman had reportedly previous exemplifying troubled youth character that could have triggered his “malice, meanness alongside wickedness “that was clearly a show of malicious act “via a .410 shotgun Furthermore, the prosecutor highlighted the violent nature of the heinous act making......

Words: 1829 - Pages: 8

Pittman Company Assignment

...Summary This new reports about analysis of sales of new Perodua Myvi. The new Perodua Myvi will be launch on June 16, will boost passenger vehicles sales this year according to automotive analysts. The Perodua’s revised sales forecast this year was easily achievable due to the earlier than expected launch of the new Myvi. The sales increase about 11.9% which from 171750 units to 195000 units. New Perodua Myvi also upgraded its Malaysia automotive total industry volume (TIV) forecast for 2011. New Myvi could be a major driver of passenger vehicle sales. The demand for the new Myvi increase due to buyer holding back as they wait for the new model. On the other hand, the sales of old model decrease. Myvi was still Malaysia’s best selling passenger car. From the OKS research, Malaysia Automotive Association, Proton shows the higher sales and the percentage change in revision is 14%. Analysis and the use of graph 1. According to the news report, OSK Research state that Perodua’s revised sales forecast of 195000 units was easy to hit the target due the high demand of New Myvi. The forecast sales are increasing 11.9% from 171750 units (previous) to 195000 units (revised). The consumer pent-up demand for the new Myvi. The increase in the demand for new Myvi can be explained using graph (a). the higher the demand for new Perodua Myvi, the higher the sales of Perodua Myvi. The demand curve shifts to right, from D0 to D1. 2. As mentioned in the report, OSK Research......

Words: 635 - Pages: 3

Companies

...Peter W, Boston Rowing Center  * Mark G, Aflac  * Nadia S, RDM  * Abel J, Dynamic REI Properties  * Lisiane J, Dynamic REI Properties  * Alexandra P, JOHNLEONARD  * Katrina A, JOHNLEONARD  * Cathi C, Neighoborhood Health Plan  * Tong Mei L, Financial services marketing company  * Chuck G, IndigoVision  * Charles F, New York Life  * Jasmine J, Weichert Realtors, Metropolitan Boston Real Estate  * Andrew R, Haworth  * Justin T, Equinox  * Jack M, Edward Jones  * Peggy G, CrowdComfort  * Douglas B, BHE Cloud Computing  * Mariangel M, Mariangel Moreno  * Helen W, MIT CIO Symposium  * Jonathan M, Trilogy Financial  * Steven S, Beacon Law Group, LLC  * Carol S, Sanchez & Santiago, CPAs  * Kevin H, WINNING, Inc.  * Alex A, Baker Engineering & Controls, Inc.  * meg v, liberty mutual  * Jannelle R, CENTURY 21 Commonwealth  * Alexandria N, Special Needs Financial Planning Team at Shepherd Financial Partners  * Tong Mei L, Financial services marketing company  * Brendan S, New York Life Insurance Company  * Chuck G, IndigoVision  * Jon C, Pro-Motions  * Jennfer Y, Aegon  * Cindy C, Virtual Cindy  * Jim H, Sikich LLP  * Jake S, McSweeney & Ricci Insurance Agents  * Amy C, Terry Chan, CPA  * Dick R, Greg Nanigian & Associates  * Phillip R,......

Words: 401 - Pages: 2

Companies

...SERVICE COMPANY A service is business sells things that are not tangible. A service company does not stock inventory, but it may need to stock tools and supplies. For example, a gardener comes to mow the lawn for a fee. He is selling a service. He may need to supply his own lawnmower, which is a cost of doing business. A maid sells the service of cleaning houses, but she may or may not need to bring her own cleaning supplies. After selling a service, there is no widget to pack up. MERCHANDISING COMPANY A merchandise business sells merchandise. Good examples of merchandising businesses include retail clothing, grocery stores and bookstores. Many people use the term "widget" to refer to any merchandise a business offers for sale when discussing business issues and dynamics. For example, a sale in which a customer receives two widgets for the price of one may refer to any type of merchandise. It could mean two pairs of shoes for the price of one or two boxes of pasta for the price of one. A merchandising company purchases inventory items to resell to customers. The company buys from several vendors and provides a central purchasing point where customers can purchase everything in one stop. The customer benefits by making one convenient stop for all her needs. Inventory represents the primary asset of a merchandising company. The typical financial transactions of a merchandising company include purchasing inventory, storing the inventory and selling the inventory to...

Words: 260 - Pages: 2

Pittman Company Accounting

...Profit and Break-Even Analysis [LO4, LO5, LO6] Pittman Company is a small but growing manufacturer of telecommunications equipment. The company has no sales force of its own; rather, it relies completely on independent sales agents to market its products. These agents are paid a commission of 15% of selling price for all items sold. Barbara Cheney, Pittman's controller, has just prepared the company's budgeted income statement for next year. The statement follows: As Barbara handed the statement to Karl Vecci, Pittman's president, she commented, “I went ahead and used the agents' 15% commission rate in completing these statements, but we've just learned that they refuse to handle our products next year unless we increase the commission rate to 20%.” “That's the last straw,” Karl replied angrily. “Those agents have been demanding more and more, and this time they've gone too far. How can they possibly defend a 20% commission rate?” “They claim that after paying for advertising, travel, and the other costs of promotion, there's nothing left over for profit,” replied Barbara. “I say it's just plain robbery,” retorted Karl. “And I also say it's time we dumped those guys and got our own sales force. Can you get your people to work up some cost figures for us to look at?” “We've already worked them up,” said Barbara. “Several companies we know about pay a 7.5% commission to their own......

Words: 616 - Pages: 3

Pittman Company

...Pittman Company is a small but growing manufacturer of telecommunications equipment. The company has no sales force of its own; rather, it relies completely on independent sales agents to market its products. These agents are paid a commission of 13% of selling price for all items sold. Barbara Cheney, Pittman’s controller, has just prepared the company’s budgeted income statement for next year. The statement follows: Pittman Company Budgeted Income Statement For the Year Ended December 31 Sales $16,080,000 Manufacturing costs: Variable $7,020,000 Fixed overhead 2,170,000 9,190,000 Gross margin 6,890,000 Selling and administrative costs: Commissions to agents 2,090,400 Fixed marketing costs 103,000* Fixed administrative costs 1,720,000 3,913,400 Net operating income 2,976,600 Fixed interest cost 534,000 Income before income taxes 2,442,600 Income taxes (40%) 977,040 Net income $1,465,560 *Primarily depreciation on storage facilities. As Barbara handed the statement to Karl Vecci, Pittman’s president, she commented, “I went ahead and used the agents’ 13% commission rate in completing these statements, but we’ve just learned that they refuse to handle our products next year unless we increase the commission rate to 18%.” “That’s the last straw,” Karl replied angrily. “Those agents have been demanding more and more, and this......

Words: 874 - Pages: 4

Company

... Riordan Manufacturing Company is expanding the infrastructure by reducing the cost of their raw materials and entire finished products. The company has an old MRP Information System (IS) and this project we will provide an opportunity to upgrade the infrastructure that will be cost efficient in the way they track their inventory. Goal of the Project: The company would like to develop a new MRP to track and manage their raw material and finished products. This will reduce their cost throughout all companies and their plants. Business Objectives: * Accurately track and manage raw and finished products * Reduce inventory cost of raw and finished products * Improve MRP infrastructure The company would like to make sure that is feasible in developing a new MRP II System to ensure the company can track and manage their products and reduce the cost of materials. We will upgrade the company communication infrastructure. Limitation: * Financial – The project should not to exceed $750.000 * Time – Both systems need to be running at the same time until all the kinks are out of the system, so we will have 12 months to get it online. * Resources – The Company will bring in a third party technical analysis team to provide the expertise needed for the project. * Policies - They will provide new polices on the new system. Information Technology Requirement: The company will use a third party group to make sure...

Words: 557 - Pages: 3

Pittman Company

...CASE 4–33 Cost Structure; Target Profit and Break-Even Analysis [LO4, LO5, LO6] Pittman Company is a small but growing manufacturer of telecommunications equipment. The company has no sales force of its own; rather, it relies completely on independent sales agents to market its products. These agents are paid a commission of 15% of selling price for all items sold. Barbara Cheney, Pittman's controller, has just prepared the company's budgeted income statement for next year. The statement follows: As Barbara handed the statement to Karl Vecci, Pittman's president, she commented, “I went ahead and used the agents' 15% commission rate in completing these statements, but we've just learned that they refuse to handle our products next year unless we increase the commission rate to 20%.” “That's the last straw,” Karl replied angrily. “Those agents have been demanding more and more, and this time they've gone too far. How can they possibly defend a 20% commission rate?” “They claim that after paying for advertising, travel, and the other costs of promotion, there's nothing left over for profit,” replied Barbara. “I say it's just plain robbery,” retorted Karl. “And I also say it's time we dumped those guys and got our own sales force. Can you get your people to work up some cost figures for us to look at?” “We've already worked them up,” said Barbara. “Several companies we know about pay a 7.5% commission to their own salespeople, along with a small salary. Of course, we would......

Words: 616 - Pages: 3

Armand Maulana - Terluka.mp3 | 1x882 Acacias 38 | Batman: La máscara del fantasma (1993)