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UCLA Contribution Margin Marginal Revenue and Marginal Cost Report

UCLA Contribution Margin Marginal Revenue and Marginal Cost Report

Question Description

Please read the Case Text “Vine street” and correct aimee’s analysis cause its flawed .

one out of the three attachments (vine street Q3) is my work if you dont mind adding to it and editing it if needed

Class Notes:

is she using it correctly?

what problem might there be? new customers column isnt adding up to the chart given (add up columns to figure out then calculate the difference in each column and that will show how many additional customers at that time and check with her number) it should be wrong, her analysis is flawed

for marginal revenue she used additional revenue per customer x by # of customers (ex $7 x 10 = $70)

actually calculate it by adding up all purchase revenue and get the mean and add up all purchase costs and get mean then subtract the two. then put this info into the chart where you multiply it by the new customers (attachment 3) MC^2 #’s should be pretty constant because its including electricity and things like that, added profit per day x by 360 in order to get the profit per year

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