UMUC: Financial Break Even and Target Profit Analysis Assignment –

UMUC: Financial Break Even and Target Profit Analysis Assignment –

Required Multimedia: * How to create a Breakeven Analysis and a Target Contribution:


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Required Readings:

Learning Topic: Financial Break Even analysis (separate file in this content Module)

* Simon, Herman. Confessions of the Pricing Man, Springer International Publishing, 2015. Chapter one. ISBN: 978-3-319-20399-7 (e-reserves)

Assignment (8%):

Learning Goals for this assignment:

1. Communication:You can communicate clearly in writing.

2. Critical Thinking: You can apply logical processes to formulate clear, defensible ideas based on the analysis of facts and ethical considerations.

3. Quantitative Reasoning: You can use mathematical information, operations, and quantitative analyses to solve problems and inform decision-making

10. Strategic Management of Financial Capital. You can plan, evaluate and manage the financial implications of the organization’s (global) operations.


In this assignment, you are a consultant making data supported recommendations to a client who desires to meet a specific profit goal (income after tax). You will :

1. Create your own original EXCEL file with price and cost data from the case, separately showing all variable cost items (costs that vary with the number of units produced) all fixed cost items (costs that are incurred independent of the number of units produced) , and the client’s current price per UNIT and number of UNITS sold.

2. In the same Excel file, create a contribution income statement, using the format in the case, (i.e., showing price x units sold (revenue), variable costs x units sold (total variable costs), contribution per unit and total contribution; total fixed costs. income before and after tax.

3. Calculate break even units at current price

4. Calculate the revenue required to meet income target after tax (profit)

5. First decision: Raise price? Calculate the price per unit needed to reach the required income target (keeping the current volume of units sold). Explain why this might or might not be a good choice.

6. Second decision: Increase volume? Calculate the units to be sold (volume) under current pricing in order to reach target income. Explain why this might or might not be a good choice.

7. Determine whether it is best to adjust price or volume in order to reach the client’s target income Compare the options and explain the rationale for your choice

8. Prepare a narrated Powerpoint presentation to your client, summarizing your findings, your comparative analysis and your recommendations. The narration should thoroughly reflect the logic of your analysis and will be evaluated based on the quality of this “written” communication. (See the below instructions on how to prepare a narrated Powerpoint presentation.

Refer to the below powerpoint, “Jewelry Case Hints” for specific guidance through your analysis.

Submit your Excel file in your assignment folder: that contains the above analyses. Title your file, “Excel case week 4.”

Submit your Powerpoint presentation in your assignment folder and title it “Presentation to Client, week 4”

When you submit your paper, your work will be evaluated using the competencies listed below. You can use the list below to self-check your work before submission.

  • 1.1 Organize document clearly in a manner that promotes understanding and meets the requirements of the assignment
  • 1.2 Develop coherent paragraphs or points so that each is internally unified and so that each functions as a part of the whole document
  • 1.3: Provide sufficient, correctly cited support that substantiates the writer’s ideas.
  • 1.4: Tailor communications to the audience.
  • 1.5: Use sentence structure appropriate to the task, message and audience.
  • 1.6: Follow conventions of Standard Written English.
  • 1.7: Create neat and professional looking documents appropriate to the project or presentation.
  • 1.8: Create clear oral messages.
  • 2.1 Identify and clearly explain the issue, question or problem under critical consideration.
  • 2.2 Locate and access sufficient information to investigate the issue or problem.
  • 2.3. Evaluate the information in a logical and organized manner to determine its value and relevance to the problem
  • 2.4 Consider and analyze information in context to the issue or problem.
  • 2.5. Develop well reasoned ideas, conclusions or decisions, checking them against relevant criteria and benchmarks.
  • 3.1 Identify numerical or mathematical information that is relevant in a problem or situation.
  • 3.2. Employ mathematical or statistical operations and data analysis techniques to arrive at a correct or optimal solution.
  • 3.3. Analyze mathematical or statistical information, or the results of quantitative inquiry and the manipulation of data.
  • 3.4. Employ software applications and analytical tools to analyze, visualize and present data to inform decision-making.
  • 10.1 Apply relevant microeconomic principles to support strategic decisions for the organization.
  • 10.2. Analyze financial statements to evaluate and optimize organizational performance.
  • 10.3. Determine optimal financial decisions in pursuit of an organization’s goals.
  • 10.5. Develop operating forecasts and budgets and apply managerial accounting techniques to support strategic decisions.


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