these changes in the selling expenses once the budget is set for that year. Thus a new budgeting method is being researched at this time. The new method‚ if adopted‚ would be based on both fixed and variable costs. The fixed costs will be those incurred at the minimum sales volume and the variable costs would be expressed as an amount per sales dollar. President Riesman and the controller understand that basing the selling costs on sales has some limitations‚ but believe that this method would
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com/online- accounting-course/30Xpg05.html. Caplan‚ Dennis. “Management Accounting Concepts and Techniques.” Management Accounting‚ 2010. Print. Fundamental Finance. Variable Costs and Fixed Costs. Retrieved at; http://economics.fundamentalfinance.com/micro_costs.php. More Business. Build the Business of Your Dreams: Fixed and Variable Cost Control: Effective Cost Cutting Strategies. Retrieved at; http://www.morebusiness.com/running_your_business/profitability/Controlling-Costs.brc.
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BU 122 Assignment 6 BYP 22-2 TBoillard (a) The variable costs per unit are: Cost of goods sold ($600‚000 ÷ 200‚000) = $3.00 Selling expenses ($140‚000 ÷ 200‚000) = .70 Administrative expenses ($40‚000 ÷ 200‚000) = .20 Total
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Cost of goods sold: Variable costs 225 612 270 360 1‚467 Contribution margin $195 $228 $270 $320 $1‚013 Unit revenue and costs information: Computer Place Poster Paper Napkins Mats Board Selling price $14.00 $ 7.00 $12.00 $ 8.50 Materials $ 6.00 $ 4.50 $ 3.60 $ 2.50 Variable factory overhead 1.50 .60 2.40 2.00 Unit variable cost $ 7.50 $ 5.10 $ 6.00 $ 4.50
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even. Shower Noozles Thermostats Storm Windows Total Sales Volume 800 220 500 1520 Sales Price 10 80 100 Sales Revenue 8000 17600 50000 75600 Variable Cost 8 70 95 Variable cost to Sales 6400 15400 47500 69300 Unit Contribution to Sales 2 10 5 Utilization of Capacity Total Variable Cost 6400 15400 47500 69300 Fixed Cost 27040 6760 16900 50700 Profit -25440 -4560 -14400 -44400 BEP (unit) 13520 676 3380 17576 CM ratio 0.2 0
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Foxy Originals 1. Discuss the pros and cons to launching the Foxy brand in the U.S. Pros: Kluger and Orol had established strong Foxy jewelry market in Canada but it is getting saturated. By expanding into the United States Foxy would be able to avoid oversaturation of the Canadian market. The U.S. jewelry market was almost 10 times larger than the Canadian market which offers great opportunity for their product exposure. With this expansion‚ Kluger and Orol could expand their production as
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Explanation: Sales were above the company’s break-even sales and yet the company sustained a loss. The apparent contradiction is explained by the fact that the CVP analysis is based on variable costing‚ whereas the income reported to shareholders is prepared using absorption costing. Because sales were above the breakeven‚ the variable costing net operating income would have been positive. However‚ the absorption costing net operating income was negative. Ordinarily‚ this would only happen if inventories decreased
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net income. c. contribution gross profit. d. controllable margin. e. none of the above 3. Pentecost Corporation desires to earn target net income of $40‚000. If the selling price per unit is $30‚ unit variable cost is $24‚ and total fixed costs are $160‚000‚ the number of units that the company must sell to earn its target net income is a. 13‚333. b. 33‚333. c. 20‚000. d. 26‚667. e. none of the above
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Ratio‚ Break Even Point‚ variable cost‚ fixed cost‚ etc it helps to take major production decisions relating to volume of production and sales‚ and profitability of such levels of sales or production. Step 1: Get acquainted with contribution margin calculation Contribution margin is the amount of money generated by selling a product over its variable cost of production. Therefore‚ mathematically it can be said that the revenue earned by a product minus its variable cost gives the contribution
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Chapter 6 Lecture Notes Variable Costing and Segment Reporting: Tools for Management JUST ONE THING - the only thing that is different is the cost classification of FMOH FMOH | |Absorption costing (full cost) | | |Variable costing | | | Sales |Product cost (COGS) | Sales |Product cost
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