FRANGOR SPA: STRATEGIC COST ANALYSIS FOR PROFIT RECOVERY by Riccardo Silvi Preliminary draft A) Overview and Strategic Financial Analysis Mr. Paolo Frangor was standing in front of the big window of his office. From there‚ he could see the wide square and the part of the building where the products -- machines for agriculture (rotary tillers‚ spading machines‚ harrows‚ …) -- were produced. He was satisfied with this new location. The bigger dimension‚ indeed‚ could help his employees do a better
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000‚000 Total Variable Cost = (Number of Workers * Worker’s Daily Wage) + Other Variable Costs 50‚000(workers) * $80(daily wage) = 4‚000‚000 + 400‚000(other variable cost) Total Variable Cost = 4‚400‚000 Average Variable Cost = Total Variable Cost / Units of Output per Day 4‚400‚000(total variable cost)/200‚000(units of output per day) Average Variable Cost = 22 Average Total Cost = (Total Variable Cost +Total Fixed Cost) / Units of Output per Day 4‚400‚000(total variable) + 1‚000‚000(total
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that classifies cost by behavior (fixed cost and variable cost). Traditional income statement is sometimes called the functional income statement. It is an income statement prepared in the multiple-step or single –step income statement format which conforms to Generally Accepted Accounting Principles (GAAP) and can be used for external financial reporting. The main difference between the two is that the contribution income statement list variable costs first‚ followed by fixed costs. Keeping in mind
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operating income between variable costing and absorption costing are due to accounting for fixed manufacturing costs. Under variable costing only variable manufacturing costs are included as inventoriable costs. Under absorption costing both variable and fixed manufacturing costs are included as inventoriable costs. Fixed marketing and distribution costs are not accounted for differently under variable costing and absorption costing. 9-2 The term direct costing is a misnomer for variable costing for two
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CHAPTER 6 COST BEHAVIOR TYPES OF COST BEHAVIOR PATTERNS 1. Variable Cost 2. Fixed Cost 3. Mixed / Semi-variable Cost Cost Structure – the relative proportion of fixed‚ variable‚ and mixed costs found within an organization or firm. 1. Variable Cost - its total dollar amount varies in direct proportion to changes in the activity level. Example: Number of Trucks Radiator Cost per Total Radiator
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Viscosity of some fluids Models with variable viscosity Differential type models Rate type models Integral type models Download Some frequently used models for non-Newtonian fluids Josef M´lek a malek@karlin.mff.cuni.cz Mathematical Institute Charles University 18 March 2011 Josef M´lek a Non-Newtonian fluids Viscosity of some fluids Models with variable viscosity Differential type models Rate type models Integral type models Download Viscosity of some fluids Fluid Air (at Benzene
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Problem 7.1 Fort Winston Hospital Variable cost per visit 5 Annual direct fixed costs 500‚000 Annual overhead allocations 50‚000 Expected annual utiliztion 10‚000 a. What per-visit must be set for the services to break even? Variable Cost Variable cost per visit 5 Volume 10‚000 Total Variable Costs 50‚000 Fixed Costs Annual direct costs 500‚000 Total Fixed Costs 500‚000 Annual overhead 50‚000 Total Costs 600‚000 Volume 10‚000 Price
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Sales (40‚000 units) $1‚000‚000 Variable expenses 700‚000 Contribution margin 300‚000 Fixed expenses 330‚000 Net income (loss) $ (30‚000) 1. What was the company ’s break-even point in sales dollars in 2008? 2. How many additional units would the company have had to sell in 2009 in order to earn net income of $30‚000? 3. If the company is able to reduce variable costs by $2.50 per unit in 2009 and other costs and unit revenues remain unchanged‚ how many units will
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Chapter 3—Predetermined Overhead Rates‚ Flexible Budgets‚ and Absorption/Variable Costing LEARNING OBJECTIVES LO 1 Why and how are overhead costs allocated to products and services? LO 2 What causes underapplied or overapplied overhead‚ and how is it treated at the end of a period? LO 3 What impact do different capacity measures have on setting predetermined overhead rates? LO 4 How are the high-low method and least squares regression analysis used in analyzing mixed costs? LO 5 How
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finances are not understood then it is likely the business will fail. Examining some key concepts from this week such as fixed‚ variable‚ and mixed costing‚ we discuss what we do and do not understand‚ and how it may apply to our everyday line of work or work performed in at a future point in time. Objective One: Understanding the distinction among fixed‚ mixed‚ and variable costs among the team is clear and understandable. Fixed costs are costs within an organization that remain the same no matter
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