Question

In: Accounting

Using the 2009 Budget (Money is given in Canadian dollars), prepare a break even analysis to...

Using the 2009 Budget (Money is given in Canadian dollars), prepare a break even analysis to find:

1. At what trip fee does JUDES break even on the trips?

2. At what participant level does JUDES break even on the trips?

Please show all formulas and calculations so I can follow along and learn how to apply the concepts for the future.

EXHIBIT 1

JUDES BUDGET 2009 - PER TRIP
Chayotepec Trip 2009
COST OF GOODS Grand Total (C$)
Ground Transportation & Guiding
Driver (including tip) $             1,649.25
Van gas $                350.00
Road tolls $                  50.00
Local Guide $                300.00
Total Ground Transportation & Guiding $            2,349.25
JUDES costs (Promotion and Administrative)
Director flight costs (1 trip; only return) $             1,300.00
Director travel insurance $                200.00
Internet Access in Mexico $                  20.00
Promotion (1.8 page ad x 4 weeks) $             1,000.00
Long distance telephone costs $                100.00
Mexican Cell Phone $                  30.00
Living in Mexico for 5 days $                300.00
Cell phone calls in Mexico $                100.00
Misc medical supplies $                250.00
Liability insurance $                500.00
Bank account & bank charges (Visa electron) $                300.00
Total JUDES' Costs $             4,100.00
Food & Accomodation Costs & Activity Costs
Saturday / Oaxaca
Hotel Azucenas $                492.50
Dinner in Oaxaca $                118.20
Sunday / Oaxaca
Breakfast - Hotel Azucenas $                  43.34
Museo de las Culturas $                  52.01
Lunch - Oaxaca $                  75.85
Monte Alban $                  59.10
Dinner in Oaxaca $                130.02
Hotel Azucenas $                270.88
Monday / Cooperativa
Hotel Azucenas (1 breakfast) $                  52.01
Hiereve El Agua $                  17.73
El Tule $                  41.37
Lunch at Alice's $                  41.37
Cooperativa (1 night) + dinner $                236.40
Tuesday / Travel to Chayotepec
Cooperativa breakfast $                  59.10
Lunch on the way $                  41.37
Interpretation trail access fee $                  59.10
Dinner in Chayotepec $                  70.92
Chayotepec - night 1 $                  88.65
Honorarium for families $                    9.85
Wednesday / Coffee Harvesting
Chayotepec - breakfast $                  70.92
Chayotepec - lunch $                  94.56
Chayotepec - dinner $                  70.92
Chayotepec - night 2 $                  88.65
Honorarium for families $                    9.85
Thursday / Tortilla Making & Walks
Chayotepec - breakfast $                  70.92
Interpretation trail access fee $                  59.10
Chayotepec - lunch $                  94.56
Chayotepec - dinner $                  70.92
Chayotepec - night 3 $                  88.65
Honorarium for families $                    9.85
Chayotepec 4 hr guided walk (2 guides) $                  47.28
Friday / Porvenir
Chayotepec - breakfat $                  70.92
Lunch in Porvenir $                  53.19
Dinner in Juchitan $                118.20
Juchitan - 1 night (3 ppl - 1 room) $                295.50
Saturday / Juchitan
Breakfast - Juchitan $                  53.19
Lunch - Juchitan $                  94.56
Dinner at Playa Azul $                141.84
Playa Azul - 1 night $                236.40
Sunday / Travel to Oaxaca
Breakfast - Playa Azul $                  53.19
Lunch on the way $                  47.28
Honoraria for Chayotepec families
Musician $                  59.10
Mid-wife / healer $                    9.85
Medicinal $                    9.85
Walk at Porvenir $                    9.85
Storytelling $                    9.85
Total Food & Accomodation Costs & Activity Costs $             3,998.71
Sustainability Fee (C$130 per person) $             1,300.00
Reciprocity Fund (C$50 per person) $                500.00
JUDES fund (C$250 per person) $             2,500.00
Total $          14,747.96
Total Cost per person $             1,474.80

Solutions

Expert Solution

The Breakeven Formula: How to Do a Breakeven Analysis

This is fairly simple. To conduct your breakeven analysis, take your fixed costs divided by your price minus your variable costs. As an equation, this is defined as:

Breakeven Point = Fixed Costs/(Unit Selling Price - Variable Costs)

This calculation will clearly show you how many units of a product you must sell in order to break even. You've recovered all costs associated with producing your product, both variable and fixed, when you've reached this point.

Every additional unit sold after this increases profit by the amount of the unit contribution margin, which is defined as the amount each unit contributes to covering fixed costs and increasing profits. This is defined as an equation as:

Unit Contribution Margin = Sales Price - Variable Costs

Sales information is not given and please provide us sales information so that we can solve the answer.


Related Solutions

1. Given the following, depict fully and explain break-even in units, break-even in dollars, total revenue...
1. Given the following, depict fully and explain break-even in units, break-even in dollars, total revenue line, total cost line, fixed cost line, break-even point, etc. Fixed Cost: $120,000 Sales per Unit: $15.00 Variable cost per Unit: $3.00 Include a discussion regarding sensitivity analysis for an inelastic product.
ACCOUNTING: PREPARE THE BUDGET PROCESS USING EXCEL a) Prepare a sales budget in units and dollars...
ACCOUNTING: PREPARE THE BUDGET PROCESS USING EXCEL a) Prepare a sales budget in units and dollars by quarter and for the year. b) Prepare a production budget in units by quarter and for the year. c) Prepare a materials purchases budget in feet and dollars by quarter and for the year. d) Prepare a direct labor budget in hours and dollars by quarter and for the year. e) Prepare an overhead budget by quarter and for the year. Show depreciation...
describe applications of break-even analysis in practice. provide limitations of break-even analysis.
describe applications of break-even analysis in practice. provide limitations of break-even analysis.
What is break-even? How is break-even calculated? How is a break-even analysis used? What are the...
What is break-even? How is break-even calculated? How is a break-even analysis used? What are the risks if break-even is not analyzed carefully?
The objective of break-even analysis is:
The objective of break-even analysis is:A.determine the number of units to produce that will equate total profit with total costB.determine the number of units to produce that will equate total revenue with total costC.determine the number of units to produce that will equate variable cost with fixed costD.determine the number of units to produce to maximize profit
the type of budgeting approach includes a break even analysis and is apart of budget planning
the type of budgeting approach includes a break even analysis and is apart of budget planning
Break-even Analysis : Break-even analysis attempts to determine the volume of sales necessary for a manufacturer...
Break-even Analysis : Break-even analysis attempts to determine the volume of sales necessary for a manufacturer to cover costs, or to make revenue equal costs. It is helpful in setting prices, estimating profit or loss potentials, and determining the discretionary costs that should be incurred. The general formula for calculating break-even units is: Break-even Units = ( Total fixed costs ) / ( Unit selling price - Unit variable cost ) In StratSim, total fixed costs can be broken into...
In March 2009, the Canadian dollar was worth $0.78 U.S. dollars. In April 2011, the Canadian...
In March 2009, the Canadian dollar was worth $0.78 U.S. dollars. In April 2011, the Canadian dollar was worth $1.06 U.S. dollars. What effect would this increase have on the trade balance between the United States and Canada? a) Canadian imports will rise and Canadian exports will fall, so the Canadian trade balance will fall and the U.S. trade balance will rise. b) Canadian imports will fall and Canadian exports will rise, so the Canadian trade balance will rise and...
17. Using the following information, calculate the Break-Even in terms of dollars and number of units....
17. Using the following information, calculate the Break-Even in terms of dollars and number of units. (15 points) BELT MANUFACTURER Cost of leather per belt- $20 Cost of one belt buckle - $25 Cost to drill holes and attach buckle per belt - $5 Management payroll per month - $10,000 Operating expense per month - $20,000 Factory rent per month - $20,000 Price charged to retail store for 5 belts - $500 Cost per belt= $20, buckle /belt=$25, drill holes&buckle/belt=$5...
What is the purpose of break even Analysis?
What is the purpose of break even Analysis?
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT