assignment 1

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By understanding of CVP analysis how might improve the performance of the manager of a human resource consulting firm like TMP human resources Consulting? The nature of the work in TMP Human Resource Consulting is boils down to recruit services the manpower to the employment requesting such as a companies, so the TMP Company's income depends on commission taken from both parties. Therefore, the corporate goal of managers and advisory service focused to provide better services to customers at affordable prices and a rival for other companies for instance, the director must be aware: The relationship between the cost of services offered by the company and the size of the demand for these services and return profit? The results of Profit through the budgeting process and evaluated continuously during the budget period. Managers must estimate the cost of Consulting , and the variable costs required to provided and sell it , the fixed costs expected for a given period , this information is combined with expected the volume of consulting and sales mixed . 1- Know what level the company start with profit. 2- The impact of increase and decrease the cost of services provided by the company and the extent of impact on the sales volume. -3 Identifies factors that increase the proportion of customers , such as increased advertising and offers submitted from the company. 4- The procedures which might be taken in case the emergence of increase in fixed overhead, like increasing in salary or change furniture company or increase the cost of communication and the Internet or buy a uniform for employees private at company, increased electricity and water bills and the wages . (Hoggett, 2012, p. 468). QUESTION: 2 ( 2) As a grad... ... middle of paper ... ...penses = $ 12,240,000 + $300,000 = $12,540,000 By using the incremental analysis (Accept an order at a special price) Accept order Reject order Net income increase (decrease) Employment services fees $ 36, 000, 000 $ 36,000,000 $ 36,000,000 Variable expenses 14, 400, 000 17,280,000 (2,880,000) Contribution margin 21 , 600 , 000 18,720,000 (2,880,000) Fixed expenses 12 ,240 , 000 12,540,000 (300,000) Profit $ 9 , 360, 000 $ 6,180,000 ($ 3,180,000) The new variable expenses increase, which negatively affecting on the contribution margin decrease by ($2,880,000). The fixed expenses value increase (advertising expenses) by $ 300,000 thus reducing the profitability. Also, the company cannot increase the service cost because of competitive pressure, probability losing customers. Decision: reject offer, the suggestion non profitability.

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