Quiz 2 1) Cost-volume-profit analysis is used primarily by management: A) as a planning tool B) for control purposes C) to prepare external financial statements D) to attain accurate financial results Answer: A Diff: 1 Terms: cost-volume-profit (CVP) Objective: 1 AACSB: Communication 2) One of the first steps to take when using CVP analysis to help make decisions is: A) finding out where the total costs line intersects with the total revenues line on a graph. B) identifying which costs are variable
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Cost of Capital Firms need to make capital investment i.e.‚ purchasing fixed assets such as factories‚ machineries‚ equipment‚ etc. After deciding what capital investments to make‚ they need to decide on the financing – sources of capital. The sources: Long-Term Debt‚ Common Stock‚ Preferred Stock and Retained Earnings. Then they need to find the cost of obtaining each source of financing today (not historical). Cost of Capital - The rate of return that a firm must earn on its investment
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times. We can see 1 customer also visiting at the end of the 10 minutes. If a curve was to be drawn on this graph‚ it would signify a decline in visitors from point 0 to 6 and a steady move from 6 to 10. 16.3 The Lower- Colorado River Authority (LCRA) has been studying congestion at the boat-launching ramp near Mansfield Dam. On weekends‚ the arrival rate averages 5 boaters per hour‚ Poisson distributed. The average time to launch or retrieve a boat is 10 minutes‚ with negative exponential
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15Q‚ where Q = Q1 + Q2. The marginal costs associated with producing in the two plants are MC1 = 3Q1 and MC2 = 2Q2. How much output should be produced in plant 1 in order to maximize profits? A. 1 B. 2 C. 3 D. 4 2. You are the manager of a firm that produces output in two plants. The demand for your firm’s product is P = 78 - 15Q‚ where Q = Q1 + Q2. The marginal costs associated with producing in the two plants are MC1 = 3Q1 and MC2 = 2Q2. What price should be charged to maximize profits? A. $20
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Mike Rose’s “I Just Wanna Be Average” essay makes me mad‚ but‚ at the same time‚ it makes me realize how lucky I am. I had never been in a special program‚ so I never thought about the students who were in those programs. Actually‚ my school had the kind of vocational track that the essay introduced‚ but I didn’t care about them because I wasn’t part of the track. Therefore‚ I really didn’t know that the students who were in that kind of special programs could be lost their identity due to poor instruction
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source same End result ! ends with financial statements ! integral part of other business aspects B. Cost Accounting Terminology 1. Nature of Cost Cost - A sacrifice of resources: Cost is a measurement in monetary terms of the amount of resources used for some purpose. Expense - The cost charged against revenue in a particular accounting period. 2. Purposes of Gathering Cost Information Routine decision making:
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than the cost of capital. The cost of capital is the rate of return that capital could be expected to earn in an alternative investment of equivalent risk. If a project is of similar risk to a company’s average business activities it is reasonable to use the company’s average cost of capital as a basis for the evaluation. A company’s securities typically include both debt and equity‚ one must therefore calculate both the cost of debt and the cost of equity to determine a company’s cost of capital
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The Cost of Absenteeism Any company’s successful operation depends in large part on the attendance of its employees. Unnecessary or unexcused absences affect company operations. Some absences are unavoidable. Others are worth taking steps to control. Absenteeism costs companies more money every year. Can you figure out what absenteeism costs your company in any given month? Can you multiply that by 12 to see what it costs in a year? Remember‚ this isn’t taking into account the cost of replacing
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Definition and explanation of mixed or semi variable cost: A mixed cost is one that contains both variable and fixed cost elements. Mixed cost is also known as semi variable cost. Examples of mixed costs include electricity and telephone bills. A portion of these expenses are usually consists line rent. Line rent normally is fixed for each month. Variable portion consists units consumed or calls made. The relationship between mixed cost and level of activity can be expressed by the following equation
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more of a headache. Go ahead and add axis labels and the chart title now. At this point it should resemble what you see above. Mess with the colors and symbols as you see fit. 4. To scale the Y Axis: double click on the region where the number labels are. You should get a formatting window where you can adjust the scale. (I.E in my graph‚ the Minimum = 55‚ the Maximum = 85‚ and the Interval = 2.5). You should be able to leave the X Axis alone. If not‚ do the same to rescale it as you see fit. 5. Calculate
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