Mayfield Software Company

          Assignment Mayfield Software Company -By Ranganadh(20162136)

1.

Ans. The customer training centre for Mayfield Software is in loss as their fixed costs are higher than their Variable costs. So, soon the customer training centre will be closed as company cannot bear loss.

2.

Ans. The company’s profit will not increase but their expenditure increases than previous as they don’t receive that central charges which are used to pay salaries of the CEO and company president, legal costs, costs related to the company's central office building, brand advertising which are fixed costs and cannot be avoided. So, the company should bare costs on their own.

3.

Ans.

[pic 1]

Profit=Quantity (Selling price per class – Variable cost per class)-Fixed Cost

Break-Even point (Profit=Zero)

Fixed Cost =Quantity (Co)

10,18,000= Quantity (Contribution Margin per class)

10,18,000= Quantity (1,145)

Quantity=889(Approx.)

4.

If the trainer cost is 3,500$ then the contribution margin per class is 1645

Profit=Quantity (Selling price per class – Variable cost per class)-Fixed Cost

Break-Even point (Profit=Zero)

Fixed Cost =Quantity (Co)

10,18,000= Quantity (Contribution Margin per class)

10,18,000= Quantity (1,645)

Quantity=619(Approx.)

5

Ans. Marie believes that the release of Customer Track 4.0 brings additional classes of 30

(average of 20 students per class)

Fixed cost per class=1197.64

Variable cost per class = 6055

Revenue per class =7200

Profit per class = Revenue per class- (Fixed cost per class+ Variable cost per class)

Profit per class = 7200-(1197.64+6055)

Profit per class= ($52.64)

Profit for 30 classes = 30*($52.64)=($1579.2)

So the group profit decreases further from ($44,750) to ($46,329.2)

6.

Ans.

From:

Marie Stefano

Mayfield Software Customer Training Centre

Kirkland

Washington

Date:6th March,2017

To

CEO

Mayfield Software Company

Washington

Subject:  Proposal Letter for new implementation at Mayfield Software Customer Training Centre

                 Kirkland Washington

Dear Sir,

I Mrs. Marie Stefano Director of Mayfield Software Customer Training Centre Kirkland Washington writing this letter regarding small implementation in the training centre. As the training centre is running in loss, I think this implementation brings profits to our training centre and the implementation is: