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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all of the costs associated with running the factory that produces the inventory. Generally‚ no part of the factory cost is expensed. Instead‚ it is capitalized as the cost of the inventory produced. It is only expensed when the inventory is sold. At that point the cost of the inventory becomes Cost of Goods Sold. This system is referred to as Absorption Costing. It is also know as “Full Costing” and “Full-Absorption Costing”. The thought is that the inventory absorbs all of the factory costs fully
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distribution cars were 20 000 10 000 5 000 Costs of marketing were 80 000 Interest costs related to loans received were 5 000 Tax expenses were 3 000 10 printing machines were produced in December. Six of those machines were sold (sales price of one printing machine was 60 000)‚ one of the printing machines was produced for own purposes – printing of marketing materials. This printing machine was put in use in December. The finished products are valued based on production costs. There was no work-in-progress
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Expenses $ 700‚000 Contribution Margin $ 300‚000 Less: Fixed Expenses $ 180‚000 Operating Income $ 120‚000 The company has no beginning or ending inventories. A total of 20‚000 units were produced and sold last month. What is the company’s margin of safety in dollars? $400 000 10 points Question 2 1. The following is Addison Corporation’s contribution format income statement for last month: Sales $1‚000‚000 Less:
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HISTORY Why was there a boom in the USA in the 1920’s? There are many factors that contributed to America’s economic boom in the 1920’s. Resources where essential at this time in USA‚ this was because many new products and items were being produced for the consumer. Natural resources like coal; minerals‚ oil and land were in great store and were a great help as a basis for further expansion. The First World War was another factor as the USA supplied Europe with many goods during this time and
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Evaluation of HeadGear‚ Inc. Learning Team 8: Sebastiano Mangiafico‚ Fredy Quintero‚ Zain Shahid‚ and Patricia Wood University of Central Florida ACG6425 June 28‚ 2012 Evaluation of HeadGear‚ Inc. HeadGear‚ Inc is a small manufacturer of headphones for use in commercial and personal applications. In recent times‚ the demand for headphones has grown steadily; however‚ the company’s profits have grown at a slower rate. John Hurley‚ the chief executive officer (CEO)‚ is concerned about the falling
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packs labelled as beef and pork meatballs from IKEA in Brno. The consignment had not been distributed to consumers. But IKEA Malaysia’s range of meatballs and sausages sold in-store are halal certified and produced locally in Malaysia. The Swedish home furniture chain-store issued a statement confirming that its meatballs sold here‚ a popular specialty with customers‚ contain only beef sourced from Australia‚ while the sausages are made from chicken sourced locally. The statement was issued
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process. Work in process inventory – consist direct materials‚ direct labor and manufacturing overhead that have entered the manufacturing process but are not yet completed. Finished goods inventory – consist completed products that have not been sold. 5) Cost of goods manufactured Direct materials: Raw material inventory beginning Add: Purchased raw materials Total raw material available
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the total revenue from an additional unit that is sold by a firm. Example‚ the total revenue when 10 units are sold is $50‚ and total revenue when 11 units are sold is $55. Marginal Revenue in this case will be (55-50)/(11-10) = $5. One can compute the total revenue if the marginal revue and the number of units sold. If the marginal revenue of a product is zero than the total revenue will not change with an increase in the number of units sold. Marginal Cost: Marginal Cost can be termed as
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1. Assume a company’s Income Statement for Year 12 is as follows: Income Statement Data Year 12 (in 000s) Net Revenues from Footwear Sales $ 280‚000 Cost of Pairs Sold 150‚000 Warehouse Expenses 15‚000 Marketing Expenses 35‚000 Administrative Expenses 8‚000 Operating Profit (Loss) 72‚000 Interest Income (expenses) (10‚000) Pre-tax Profit (Loss) 62‚000 Income Taxes 18‚600 Net Profit (Loss) $ 43‚400 Based on the above income statement data (assume interest income is zero)‚ the company’s interest
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