Sales (40‚000 units) $1‚000‚000 Variable expenses 700‚000 Contribution margin 300‚000 Fixed expenses 330‚000 Net income (loss) $ (30‚000) 1. What was the company ’s break-even point in sales dollars in 2008? 2. How many additional units would the company have had to sell in 2009 in order to earn net income of $30‚000? 3. If the company is able to reduce variable costs by $2.50 per unit in 2009 and other costs and unit revenues remain unchanged‚ how many units will
Premium Variable cost Costs Management accounting
Costing Introduction The Cost of a product of comprises of materials‚ labour‚ and over heads. On the basis of variability they can be broadly classified as fixed and variable costs. Fixed costs are those costs which remain constant at all levels of production within a given period of time. In other words‚ a cost that does not change in total but become. Progressively smaller per unit when the volume of production increases is known as fixed cost. it is also called period cost eg. Rent‚ Salary‚ Insurance
Premium Variable cost Costs Cost
2. Total Fixed Costs: The sum of all costs required to produce the first unit of a product. This amount does not vary as production increases or decreases‚ until new capital expenditures are needed. Fixed Costs: Fixed costs are those business costs that are not directly related to the level of production or output. In other words‚ even if the business has a zero output or high output‚ the level of fixed costs will remain broadly the same. In the long term fixed costs can alter - perhaps
Premium Variable cost Costs Fixed cost
Indirect costs @ 25% of $3‚675.00 $ 906.00 Subtotal $4‚529.00 8. Profit margin @ 5% of $4‚594.00 $ 227.00 Total $4‚756.00 Fixed Cost Conference room rental $175.00 Audiovisual equipment rental $75.00 4 Presenters @ $500.00 $2‚000 Indirect Cost @25% of $3‚675 $906.00 Profit Margin @5% of $4‚594 $227.00 Total Fixed Cost $3‚383.00 Variable Cost 45 Workbooks @ $15.00 $675.00 45 Lunches @ $12.00 $540.00 45 Coffees @ $3.50 $157.50 Total Variable Cost $1372.50 My
Premium Variable cost Costs Fixed cost
the key elements of the break-even analysis will be discussed. The key elements of break-even analysis are fixed cost‚ variable cost‚ total revenue‚ break-even point and margin of safety. Although break-even analysis is very useful‚ it has disadvantages. Break-even analysis is based on the production cost of the company which includes the fixed cost and variable cost. Then the total cost of the production is compared with the total sales revenue to find out the breakeven point. The break even analysis
Premium Costs Variable cost Cost
Appendix 2. a) Parking‚ Concession‚ Merchandise cost includes both fixed and variable costs. Variable Costs = | 10% * Revenue | | | Fixed Costs = | Total expense - | Variable Cost | | | | | | Costs | Variable | Fixed | Total Cost | Parking expense | 19‚767 * 10% = | 4‚448 - 1‚976.70 = | | | $ 1‚976.70 | $ 2‚471.30 | $ 4‚448.00 | Concession expense | 79‚273* 10% = | 43‚356 - 7‚927.30 = | | | $
Premium Variable cost Costs Fixed cost
what will happen to the financial results if a specified level of activity or volume fluctuates. This information is vital to management‚ as one of the most important variables influencing total sales revenue‚ total costs and profits is output or volume. Break-Even Analysis is based on the relationship between sales revenue‚ costs and profit in the short run. The short run being a period in which the output of the firm is restricted to that available from current operating capacity. In the short
Premium Variable cost Costs Fixed cost
(JAMIE KINCADE) No COST ELEMENT 1 New Fixtures 2 Worker Salary Worker Bonus Capacity Worker 3 Purchased Component J-42 Shipping and Delivery cost 4 Rental Assembly Table and 5 Equipment 6 Kincade Salary 7 Office Manager Salary 8 Miscellaneous Cost 9 Chelsea Purchase Commitment Chelsea agent’s best guest Kincade Commitment Price 10 Additional Investment 11 Labor hours Assumption PRICE $ $ 900.00 6.75 20% 15 1.53 0.09 1‚080.00 $ $ $ $ $ $ $ $ $ UNIT
Premium Variable cost Costs
sold‚ a variable cost is a cost that varies‚ in total‚ in direct proportion while a fixed cost remains unchanged‚ in total‚ regardless of any change. ->Examples of fixed and variable costs in respect to small changes in the measure of selling CDs: Cost | Cost behavior | | Variable | Fixed | The cost of advertising new store | | X | Number of CDs supplied | X | | The cost of renting space for store | | X | The electrical cost in store | | X | The direct labor cost | | X |
Premium Costs Variable cost Fixed cost
Selected HW Module 15 Q15-1. Cost-volume-profit analysis is a technique used to examine the relationships among the total volume of some independent variable‚ total costs‚ total revenues‚ and profits during a time period. It is particularly useful in the early stages of planning when it provides a framework for discussing planning issues. Q15-4. In a contribution income statement‚ costs are classified according to behavior as variable or fixed‚ and the contribution margin (the difference between
Premium Variable cost Costs Contribution margin