Calculate the variable costs per order received at a trade show and the variable costs per order received through a sales rep? For each order received at a trade show‚ the variable cost can be determined as follow: Manufacturing cost for necklace | $8.05 | | Number of necklaces | 25 | | | Sub-total | $201.25 | Manufacturing cost for a pair of earring | $5.50 | | Number of pairs of earrings | 12 | | | Sub-total | $66.00 | Shipping cost | | $15 | | Total variable cost | $282
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Check Week 2Results Concepts Marginal Revenue‚ Marginal Cost‚ and Production Marginal Productivity Mastery 100% Questions Score: 12/14 1 2 3 7 100% 4 5 6 9 11 Average Total Cost 0% 8 10 Fixed and Variable Costs 100% 12 13 14 Concept: Marginal Revenue‚ Marginal Cost‚ and Production Concepts Marginal Revenue‚ Marginal Cost‚ and Production Mastery 100% Questions 1 2 3 7 1.Purely competitive firms increase total revenue
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------ ------ Machine hours required per unit 2.5 3.0 Standard cost per unit: Direct material $ 2.25 $ 3.75 Direct labor 4.00 4.50 Manufacturing overhead: Variable (See Note 1) 2.00 2.25 Fixed (See Note 2) 3.75 4.50 ------ ------ $12.00 $15.00 ======
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CHAPTER 5: COST THEORY Overview of Huxley Maquiladora Huxley Manufacturing Company‚ a large firm in the defense industry‚ is considering a strategic move to shift production from its California plant to Mexico. Tariff reductions made possible by the North American Free Trade Agreement (NAFTA) opened up the potential to enjoy significant cost savings by shifting production south of the Mexican border. Huxley is considering three options. The simplest option is to negotiate a subcontracting
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Reduction After 5% Reduction Per Unit Total Per Unit Total Sales Revenue $ 400 $ 6‚000 $ 380* $ 6‚612* Variable Costs: COGS: Compressor 70 1‚050 70 1‚218 Other Direct Material 37 555 37 643.80 Direct Labor 30 450 30 522 Variable Overhead 45 675 45 783 Total COGS 182 2‚730 182 3‚166.80 Variable Selling 18 270 18 3‚13.20 Total Variable Costs 164 3‚000 200 3‚480 Contribution Margin $ 236 $ 3‚000 $ 180 $ 3‚132 *in thousands of dollars *$400
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Chapter 8 Review Questions and Exercises. Completion Statements 1. The variable overhead flexible-budget variance subdivides into which two variances? Spending Variance and efficiency Variance. 2. To compute the budgeted variable overhead cost rate for a manufacturing company divide budgeted variable overhead costs by the budgeted quantity of the Cost allocation base. 3. To compute the budgeted fixed overhead cost rate for a manufacturing company‚ divide budgeted fixed overhead costs by the
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ACC 307: Cost Accounting Fall 2012 Practice Exam II I. TRUE / FALSE 1. A budget generally includes both financial and nonfinancial aspects of the plan. 2. The revenues budget should be based on the production budget. 3. A favorable variance should be ignored by management. 4. The direct manufacturing labor price variance is likely to be unfavorable if lower-skilled workers are put on a job. 5. For fixed overhead costs‚ the flexible-budget amount is always the same as the
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and fixtures are the only variable cost with respect to revenue hours. All other costs are fixed with respect to revenue hours. With higher fixed cost‚ Salem Data Services has a higher leverage and is therefore riskier. 2. ($7‚896 + $1‚546) / 329 hours = $28.70 / hour. For every hour spent working‚ the company spends 28.70 dollars. 3. Intracompany Commercial Total Number of Hours (a): 205 138 343 Revenue (a x b): $82‚000 $110‚400 $192‚400 Variable Costs (a x c): ($5‚883.50)
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achieve a target operating income 3. Understand how income taxes affect CVP analysis 4. Explain how managers use CVP analysis in decision making 5. Explain how sensitivity analysis helps managers cope with uncertainty 6. Use CVP analysis to plan variable and fixed costs 7. Apply CVP analysis to a company producing multiple products All managers want to know how profits will change as the units sold of a product or service change. Home Depot managers‚ for example‚ might wonder how many units of
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mathematical model shows the relationship between quantifiable and non-quantifiable information. ANSWER: FALSE {moderate‚ THE QUANTITATIVE ANALYSIS APPROACH} 1.8 Decision variables may also be called parameters. ANSWER: FALSE {moderate‚ THE QUANTITATIVE ANALYSIS APPROACH} 1.9 Model variables can be controllable or uncontrollable. ANSWER: TRUE {moderate‚ THE QUANTITATIVE ANALYSIS APPROACH} 1.10 A series of steps or procedures that are repeated is known
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