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AN ESSAY ON HOW TO SAVE MONEY
how i save money essay
how i save money essay
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Basic Research Techniques
Data Analysis & Research Techniques
Currently, the organization operates two buildings approximately 3 miles apart with a combined operating cost of $256,100 per year. These operating costs include lease expense, garbage and recycling services, security, janitorial, taxes, power, water and sewer, insurance, gas and printed materials. These costs could be reduced if the company were to consolidate into one facility.
Table 1. Cost Comparisons
Item Building A Building B Subtotal A&B Unified Building C
Lease $32,000 $12,000 $44,000 $40,000
Garbage $8,000 $5,000 $13,000 $9,000
Security $4,000 $4,000 $8,000 $4,000
Janitorial $6,000 $6,000 $12,000 $8,000
Taxes $8,000 $8,000 $16,000 $8,000
Power $52,000 $41,000 $93,000 $70,000
Water & Sewer $16,000 $12,500 $28,500 $22,000
Insurance $5,000 $5,000 $10,000 $7,000
Gas $13,000 $11,000 $24,000 $23,000
Printed Materials $3,800 $3,800 $7,600 $5,000
Totals 147,800 108,300 $256,100 $196,000
cost per sq. ft (mo) $5.68 $5.55 $5.63 $5.16
Number of Employees 80 40 120 117
Total Sq. Ft. 26,000 19,500 45,500 38,000
As shown in Table 1, the total operating cost for the consolidated facility would be $196,000 per year. Each employee requires at least 200 square feet (True Cost), but the need for public spaces such as hallways, kitchen area, restrooms, etc. would be reduced, so SSB can operate with less total square footage than with the two separate buildings.
Unifying the facilities could save $60,100 per year in operating costs. Also, the costs of office supplies and printed materials could decrease. The company could also eliminate three positions, which is one of the bigger savings an organization can make (True Cost). Table 1 includes this reduction in force.
Consolidation would bring some of the same functions together under one roof, creating some duplicity in duties, and the company could elect to eliminate these three positions: one receptionist, one mailroom clerk and one janitor. The savings to the company would include the wages, benefits, and the cost per square foot for their personal space. This study shows that the cost per square foot will decrease from $5.63 to $5.16 per month, so if each employee were allotted 200 sq. ft (Dess), then the annual cost savings by eliminating three positions alone would be worth $1,800. Their salaries and benefits come to nearly $150,000 between the three of them; therefore, the aggregated savings through eliminating these three positions could total $151,800 per year.
As observed in a random survey of 70 employees, nearly all surveyed agreed that the distance between buildings was creating productivity issues for them. Eighty-seven percent replied that they spent over 1 hour per week traveling between the two buildings.
Next I will need to find out the yearly net income from the investment. This will be gross ticket sales minus the total expenses. Deer Valley expects 300 skiers per day for 40 days at $55.00 per ticket, giving us $660,000 in ticket sales. In order to figure the total expenses I need to separate the fixed and variable expenses. Fixed expenses are those that will be there everyday the lodge is open regardless of the number of skiers. The Lodge is open 200 days per year and the cost of running the new lift is $500 per day for the entire 200 days giving us $100,000 in fixed costs. Variable costs are the expenses based on the number of customers. There is an additional $5 expense per skier per day associated with the new lift. If there are 300 skiers multiplied by $5 each multiplied by the 40 days that they are expected to be on the lift, we will have $60,000 in variable expenses. Fixed costs of $100,000 plus the variable costs of $60,000 will give us $160,000 in total expenses. The gross ticket sales of $660,000 minus the total expenses of $160,000 give us a yearly net income of $500,000.
The parent company cost to build a store would be $80,000 ($10,000 profit). The cost timeframe would be an $80,000 expense in the month that the store opened.
Our decision is that Mr. Butkus should choose to implement both options. The additional capacity is definitely needed, and the demand to fill the capacity is also present. We calculated the possible revenue that could be earned under two sections: Low additional demand and High additional Demand. The additional revenue generated in these two scenarios are $42 900 and $31 200, respectively. Also, the in both of these scenarios, the time needed to pay for the cost of the required expansions are less than a year.
The presentation of the material is in dollars only. Overhead is applied to products as a percent of direct labor dollar cost. Factory profit for each year is found by subtracting direct material, direct labor, and direct overhead costs from total sales. The overhead percentage is calculated at the same time budgeting and is applied as a single overhead pool throughout each model year. The consulting company used 435% of direct labor costs in 1987 for their study; the budgeted was actually 437% (OH/DL=107,954/24,682). A similar percentage applies in the following year (109890/25294=434.5%). However in the next two years, after the outsourcing of oil pans and mufflers was enacted, the allocation of overhead in...
The estimated free cash flows for the two strategies are $391 million for the growth strategy and $365 million for the maintain strategy. (Please refer to the excel sheet for breakdown of calculation).
Kinsell, Krik. (June 2005). Factors to consider when planning consolidation. Franchising World, Vol. 37, Issue 6, pp. 63–65. Retrieved September 2, 2008, from: kirk.kinsell@ichotelsgroup.com
Assume required profit is equal to selling, general and administrative expenses so after expenses they will breakeven.
Denver International Airport Construction and Operating Costs. (1997, July 5).University of Colorado Boulder. Retrieved April 28, 2011, from http://www.colorado.edu/libraries/govpubs/dia.htm
An organization costing system is a system that helps the management with the strategy planning while the system plays an important role in providing accurate cost information about the products and customers (Curtin, 2006). UPS utilizes the Activity-Based Costing (ABC) system. ABC assumes that activities cause costs and that cost objects create the demand for activities (Marx, 2009). The key to cost allocation under ABC is to identify the activities that are performed to provide a particular service and then aggregate the costs of the activities (Gapenski, 2012). This is a marked departure from the practice of sharing overheads costs equally or overheads becoming part of the overall profit-loss estimate instead of component product pricing (Nayab, 2011).
...ngs if the donations department decided to completely eliminate it completely, but the savings that I calculated was lower than what the committee calculated. The savings the budget committee found includes the part time student help/additional funds, which has not been incurred yet. This portion of the building being used by the donations department to me actually helps the library based on facility costs because it may become vacant and will be paying for an empty room. So the library would only be saving $19,000 at the very least instead of $23,900. It could even be lower considering that those facility costs (highlighted above) would still be paid for by the library if they decided to use it for something else in replace of the donations department. These are some of the errors in logic that the committee made that changes the analysis of this case study.
After analyzing our most recent annual report from 2012. We noticed that our operational cost is approximately $20,000 over our revenue. Looking at our data from previous years, the $20,000 over-budget has occurred in the past. In 2010, Partners in Health had approximately $90,000 in unused funds which carry over at the end of ...
A Capital One Financial Corporation has established such workplace by providing mobility and flexibility to their employees in business units. They implemented a concept “virtual workplace” which is based on reconfiguring office space and use of up to date mobile technology. It gives employees opportunity to be more productive since they are able to work from any place they would choose. According to the Benefits Survey Report from the Society for Human Resource Management published i...
Operating budget is the most appropriate budget for managing unit cost. The operating budget is a financial plan that takes into consideration all of the day-to-day activities that involve taking care of patients. A units revenue, which is the actual charges, are based off of the total number of days patients spend on the unit or the average daily census. Expenses include all of the cost for paying nursing staff to work, the cost of all supplies that are necessary to provide patient care, and the cost of any additional resources that may be necessary for patient care. The unit expenses can be broken down into two main types of expenses. One, is the employment cost. The employment cost is the largest part of any units budget. This is due
o Pay $200,000 up front for development fees and franchise fees for the first five stores
Every company has some kind of Revenue and they all have costs that are associated with running the company. It is also true that if a company wants to increase their Revenue, their costs will increase too. It is every company’s goal to maximize revenue and either through Production or Services, and minimize cost. These things are easy to figure out, but actually identifying the production and figuring out how it will increase or decrease with change is very difficult.