expected cost per unit if all manufacturing and shipping overhead (both variable and fixed) was allocated to planned production? What was the actual per unit cost of production and shipping? Total budgeted costs (both variable and fixed) = 512‚800 + 26‚000 = $772‚800 Total budgeted units = 18‚000 Total expected cost per unit = 772‚800 / 18‚000 = $42.93 Total actual costs (both variable an fixed) = 432‚000 + 261‚200 = $693‚200 Total actual units
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2.52 125‚000.00 2‚000 Per month Per month Per month Product Per year Product Per year Per unit Per Invesment Per Labor Per Year Questions 1 Variable Cost per unit? Fixture cost/(Capacity*Labor hour) Worker Salary/Capacity Worker bonus/capacity Component cost Shipping and delivery Equipment/(capacity*Labor hour) variable cost per unit $ $ $ $ $ $ $ 0.03 0.45 0.09 1.53 0.09 0.02 2.21 Fixed Cost per Month? Rental Kincade Salary Office Manager Salary
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/ 1 How do managers plan for variable overhead costs? Managers plan for variable overhead changes with the level of activity‚ so if managers think they are overspending on variable overhead‚ managers are able to slow or stop the production process and investigate. If some reason a company needs to increase production‚ managers have to check and add variable overhead as needed. 1. How does the planning of fixed overhead cost differ from the planning of variable costs? Fixed overhead costs involve
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inventory will include direct materials‚ direct labour‚ and both variable and fixed manufacturing overhead. As a result‚ absorption costing is also referred to as full costing or the full absorption method. On the other hand absorption costing is often contrasted with variable costing or direct costing. Under variable or direct costing‚ the fixed manufacturing overhead costs are not allocated or assigned to the products manufactured. Variable costing is often useful for management’s decision-making.
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the company currently sells 2‚000 bottles per day. Following is a summary of the company’s income and costs on a daily basis. Sales Revenue $40‚000 Incremental Variable Costs $16‚000 Nonincremental Fixed Costs $20‚000 Note: You can assume that variable costs are constant so that the average of them is the variable cost relevant for a change in sales. One can calculate the change in sales volume necessary for the price change to be profitable by using the following Basic Breakeven
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OBJECTIVES INTRODUCTION MEANING DEFINITIONS TYPES OF COSTS MONETARY COSTS REAL COSTS OPPORTUNITY COSTS ECONOMIC COSTS ACCOUNTING COSTS INCREMENTAL COSTS SUNK COSTS FUTURE COSTS PRIVATE‚ EXTERNAL AND SOCIAL COSTS FIXED / SUPPLEMENTARY / OVERHEAD COSTS VARIABLE / PRIME COSTS REPLACEMENT COSTS PRODUCTION COSTS SELLING COSTS CONTROLLABLE COSTS DIRECT COSTS INDIRECT COSTS SHORT RUN COSTS CURVES LONG RUN COSTS CURVES OBJECTIVES To understand the meaning of cost. To discuss different types of costs. To describe
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divided by the total number of individuals in the group n. This provides an estimate of the parameter p‚ the proportion of individuals who support the candidate in the entire population. The binomial distribution describes the behavior of a count variable X if the following conditions apply: the number of observations n is fixed‚ each observation is independent and represents one of two outcomes ("success" or "failure") and if the probability of "success" p is the same for each outcome. If these
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fixed cost plus variable cost. This concept is further explained by the the following equation: [Break even sales = fixed cost + variable cost] The break even point can be calculated using either the equation method or contribution margin method. These two methods are equivalent. Equation Method: The equation method centers on the contribution approach to the income statement. The format of this statement can be expressed in equation form as follows: Profit = (Sales − Variable expenses) − Fixed
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Profit. This knowledge is not sufficient for management for discharging the functions of planning and control‚ etc. The cost is further divided according to its behavior‚ i.e.‚ fixed cost and variable cost. The age-old equation can be written as: Sales - Cost = Profit or Sales - (Fixed cost + Variable Cost) = Profit. The relevance of segregating costs according to variability can be understood by a very simple example of a shoe-maker‚ whose Cost data for a particular period is given below:
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Cost data that are classified and reported in a particular way for one purpose may be inappropriate for another use. 2.6 Fixed costs remain constant in total across changes in activity levels‚ whereas variable costs change in proportion to the level of activity. Examples are: Fixed costs Variable costs Salaries of permanent staff Casual staff salaries will vary with forecast demand and the need to cover permanent staff leave arrangements Depreciation of buildings and equipment Paper and postage
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