Log Co has an operating gearing ratio of 33.33%.Its sales are currently$100m and its operating profit is$20m.Operating gearing is calculated by dividing fixed costs by variable costs.
What will its operating profit be its sales increases by 15%?
考点：The calculation of operating profit
解析：In order to calculate the operating profit,the total cost must be calculated first.As sales are$100m and profit is$20m,the total cost will be$80m.Given the operational gearing is 33.33%,the fixed cost to variable cost will be in the ratio of 1:3.The fixed cost can be calculated as¼x$80m=$20m and the variable cost will be$60m.Contribution will be$40m before the increase in sales.After the 15%increase in sales the new contribution will be 1.15 x$40m=$46m and the new operating profit will be$46m-$20m(FC)=$26m
A bank has developed a new type of account called the Gold Account.Development and advertising costs were$50,000.At the start of each of the next four years,1000 customers are expected to open a Gold Account and to pay the bank$300 each year that they use it.Of the 1,000 customers who open a Gold Account,500 are expected to close the account after one year and 500 after two years.The bank estimates it will cost$400 per customer to administer the Gold Account in the customer’s first year reducing to$50 per customer in the second year.
Ignoring the time value of money,what is the lifecycle profit per customer of Gold Account?
考点：The calculation of a lifecycle profit in a service industry
The account runs for 4 years
Year 1 1000 new customers
Year 2 1000 new customers 500 from year 1
Year 3 1000 new customers 500 from year 2
Year 4 1000 new customers 500 from year 3
500 from year 4
Total 4000 2000
From the above,since customers are joining every year for the 4 years there will be a total of 4000 customers that will cost the bank$400 per customer in the first year and 2000 customers in total that will cost$50 per customer in the second year
Calculation of profit over the life cycle will be as follows:
First year 4000 x($300-$400)
Second year 2000 x($300-$50)
Less the development and advertising costs($50,000)
Divided by 4000 customers
Lifecycle profit per customer$12.50