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Expenses Product Expenses Contribution Margins % CM vs Sales Periode Expenses Interest Expense Advertising Expense Depreciation Expense Other Expense General and Administrative expenses News 653,761 473,547 51,456 525,003 128,758 19.69% Used 254,978 161,319 23,785 185,104 69,874 27.40% 197,083 197,083 (9,142) -4.86% Services 187,941
Total Periode and General and Administrative expenses Profit Before Tax
Description Sales Trade in Cash Basis Cost Blue Book Cost Commision Recondition Transmission Total Cost Contribution Margin Payment Schema Mercury 1993 Price Used Car Cash Service Rules Materials outside inside Used Car $ $ $ $
New* 15,200 $
Used 7,899
$ $
$ $ $
Services 1,200
Total 25,499
blue book
15%
Warren Ford Income Statement 1991-1992 Description Sales Revenue New Cars Used Cars Service to Outsiders Total Sales Cost Of Sales Cost of New Cars Sold Allowances on Traders Sales Commission,new Sales Commission,used Service Expenses Reconditioning Outside Customers Product Expenses Contribution Margins Periode Expenses Interest Expense Advertising Expense Depreciation Expense Other Expense General and Administrative expenses Total Periode and General and Administrative expenses Profit Before Tax Amount 653,761 254,978 187,941 1,096,680 473,547 161,319 51,456 23,785 51,110 145,973 907,190 189,490 24,765 2,432 9,976 4,893 38,400 80,466 109,024 Total
Cost - Chuck Farley - Ralph Sawchuck - Finally Payment Customer Paid Used Car Price Used Cars - Need new transmission 13,600
9,000 7,400.00
Collect Information Restored liquidity and profitability to the dealership - reduction in the work force - tight cost control of the service center - stronger rewards for sales and service activity - reductions in its inventory - sales of many used cars at local wholesale auction - increase new car sales Second owner was not as aggressive as the forst in advertising and promotion Didn't offer leasing services
Responsibility Centers ---> all department treated as a profit center--> rumors that rewards system had caused mu - Chuck Farley New Car Manager - Ralph Sawchuck Used Car Manager - Chuck Watt Service Manager
The new car manager had the option of selling trade-ins to the used car manager or wholesale at the weekly auct The used car manager had the option of purchasing the trade-ins from the new car manager or could purchase us The service manager was obliged to give first priority to service the new and used cars of the dealership and was f
r or wholesale at the weekly auction car manager or could purchase used cars at the auction or from any other source d cars of the dealership and was free to service outside customers as he had both the opportunity and the slack capcaity
he slack capcaity
Warren Ford Income Statement 1991-1992 Description Sales Revenue Total Sales Cost Of Sales Sales Commission Service Expenses Product Expenses Contribution Margins % CM vs Sales Periode Expenses Interest Expense Advertising Expense Depreciation Expense Other Expense General and Administrative expenses News 653,761 473,547 51,456 525,003 128,758 19.69% 197,083 197,083 (9,142) -4.86% Services 187,941
Total Periode and General and Administrative expenses Profit Before Tax
Transfer Price New Car Price Commision Cost Blue Book Cost Commision Recondition Transmission Total Cost Contribution Margin Total Cost Laba Bagi Department New Laba Bagi Department Used $
New 16,400 $
Used
Total
15,600 $ 32,000
$ $
$ $ $ $ $
Payment Schema Mercury 1993 Price Used Car Cash Service Rules
$ $ $
Materials outside inside Used Car Car Price Cost Price Trade in Recondition Transmission Overhead Cost
30% from cost as overhead 15% from cost as overhead blue book 15,600 6,200 300 900 180
Description New Car Price Sales Used Car Commision Cost Blue Book Cost Commision Recondition Transmission Total Cost Contribution Margin Payment Schema Mercury 1993 Price Used Car Cash
$ 13,600 $ 13,600 $ 810 $ 810 $ 300 $ 300 $ 900 $ 900 $ 15,610 $ 15,610 $ 8,190 $ 8,689 49.9% 53.0% $ 16,400 $ 15,200 $ 7,400 $ 6,200 $ 9,000 $ 9,000
Description Sales Trade in Cash Basis Cost Blue Book Cost Commision Recondition Transmission Total Cost Contribution Margin
Used $ 7,899
Used* 7,899
Services* 1,600.00
(400)