MARGINAL COSTING AS A COSTING SYSTEM Marginal Costing is a type of flexible standard costing that separates fixed costs from proportional costs in relation to the output quantity of the objects. In particular‚ Marginal Costing is a comprehensive and sophisticated method of planning and monitoring costs based on resource drivers. Selecting the resource drivers and separating the costs into fixed and proportional components ensures that cost fluctuations caused by changes in operating levels‚ as
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accounts in the subsidiary ledger as variable‚ fixed‚ or mixed using qualitative methods? (TCO 4) In evaluating different alternatives‚ it is useful to concentrate on (TCO 5) The theory of constraints is used for cost analysis when (TCO 5) Schmidt Corporation produces a part that is used in the manufacture of one of its products. The costs associated with the production of 10‚000 units of this part are as follows: Direct materials $45‚000 Direct labor 65‚000 Variable factory overhead 30‚000 Fixed
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the company produces. a) Master Budget Number of units 30‚000 Sales prices 36 Sales revenue 1‚080‚000 Variable manufacturing costs Materials 9.00 (270‚000) Labor 4.50 (135‚000) Overhead 6.30 (189‚000) Variable G‚S‚&A 7.20 (216‚000) Contribution margin 270‚000 Fixed costs Manufacturing (135‚000) General‚ selling & adm. (54‚000)
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important step in management ’s decision-making process is to determine and evaluate possible courses of action. 2. In making decisions‚ management ordinarily considers both financial and nonfinancial information. 3. In incremental analysis‚ total variable costs will always change under alternative courses of action‚ and total fixed costs will always remain constant. 4. Accountants are mainly involved in developing nonfinancial information for management ’s consideration in choosing among alternatives
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Gina sells 20 shirts‚ what will her total revenue be? What will her total variable cost be? (F) Fixed Cost= $350.00 (V) Variable Cost= $8.00 (S) Selling Price= $15.00 (X) Number of Units Sold= 20 Revenues = (S)(X) = (15)(20) = $300.00 Total Variable Cost = (V)(X) = (8)(20) = $160.00 If Gina sells 20 shirts her total revenue will be $300.00 and her total variable cost will be $160.00. (b) How many shirts must Gina sell to break even
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….‚ xk) Where x1‚ x2‚ x2‚ ….‚ xk Independent variables Y dependent variable Descriptive Predictive Prescriptive Math. Model Estimates of ind. Variables have to be made to predict the dep. variable There is uncertainty in the ind. Variables‚ this model describes the outcome or behavior of a given operations Taking different values of ind. Variables prescribes best possible Value for dependent variable The Problem –solving Process
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as direct materials‚ direct labor‚ and overhead. ____ 6. Costs can display variable‚ fixed‚ or mixed behavior‚ and it important that they are classified accurately. ____ 7. A cost that does not change as output changes is a variable cost‚ and one that changes is a fixed cost. ____ 8. Fixed costs are costs that‚ in total‚ are constant within the relevant range as the level of the associated driver varies. ____ 9. Variable costs are defined as costs that‚ in total‚ are constant regardless of change
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MODULE 1 Management Accounting Module 1 Management Accounting Objectives Aim To provide an understanding of the nature of management accounting and its role in the process of managing and controlling the enterprise. Key Concepts ▪ Management accounting ▪ Management control ▪ Decision making Learning Outcomes By the end of this section you should be able to understand: ▪ The purpose of management accounting ▪ The concepts and processes of control. The
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price of $30. During the month‚ fixed costs were $16‚800 and variable costs were 80% of sales Business - Accounting BE18-1 Monthly production costs in Pesavento Company for two levels of production are as follows. Cost 3‚000 units 6‚000 units Indirect labor $10‚000 $20‚000 Supervisory salaries 5‚000 5‚000 Maintenance 4‚000 7‚000 Indicate which costs are variable‚ fixed‚ and mixed. Indirect labor Variable cost Supervisory salaries Fixed cost Maintenance Mixed
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3. Within the relevant range‚ if there is a change in the level of the cost driver then A. fixed and variable costs per unit will change. B. fixed and variable costs per unit will remain the same. C. fixed costs per unit will remain the same and variable costs per unit will change. D. fixed costs per unit will change and variable costs per unit will remain the same. 4. The strategy MOST likely to reduce the breakeven point would be to
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