Problem 9-7 (75 minutes) (LO1 CC3‚ 4) 1. The Afl5.60 per drum general overhead cost is not applicable to the decision‚ since this cost will be the same paying little mind to whether the organization chooses to make or purchase the drums. Likewise‚ the present depreciation figure of Afl3.20 per drum is not an applicable cost‚ since it speaks to a sunk cost notwithstanding the way that the old gear is exhausted and should be supplanted. The cost depreciation of the new gear is an applicable cost‚ since
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Required: 1. Fill in the following table with your estimates of total costs and average cost per cup of coffee at the indicated levels of activity for a coffee stand. Round off the cost of a cup of coffee to the nearest tenth of a cent. Cups of Coffee Served in a Week 1 ‚800 1 ‚900 2‚000 Fixed cost . . . . . . . . . . . . . . . . . . . . . . . . . Variable cost . . . . . . . . . . . . . . . . . . . . . . . Total cost . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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expenses $18 Total Variable Cost $113 Fixed cost per unit: Total Cost ÷ Budgeted Volume = cost per unit Fixed manufacturing overhead $600‚000 ÷ 50000 = 12 Fixed selling and administrative expenses $400‚000 ÷ 50000 = 8 Fixed cost per unit 1‚000‚000 $20 Total unit cost = 113 + 20 = $133 (a) Desired ROI per unit = (1‚200‚000 x 0.25) ÷ 50000 = 6 Markup percentage = Desired ROI ÷ Total Unit Cost = 6÷133 = 4.51% Target Selling Price = Total Unit Cost + Desired
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SREERAM COACHING POINT COST Management Test Questions & Suggested Solutions by L. Muralidharan‚ FCA.‚ Grad. CWA.‚ COST MANAGEMENT - TEST QUESTIONS & SOLUTIONS Question: 1 Bharata Ltd is considering proposals for design changes in one of a range of soft toys. The proposals are as follows: (a) Eliminate some of the decorative stitching from the toy. (b) Use plastic eyes instead of glass eyes in the toys (two eyes per toy). (c) Change the filling material used. It is proposed that scrap fabric
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director of the Westchester Home-Delivered Meals (WHDM) program decides to again recompute fixed costs‚ variable costs‚ and the BEP using the high–low method. Here are the number of meals served and the total costs of the program for each of the first six months: Month Meals Served Total Costs July 3‚500 $20‚500 August 4‚000 22‚600 September 4‚200 23‚350 October 4‚600 24‚500 November
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1-14B Contribution Format versus Traditional Income Statement (LO5) CHECK FIGURE (2) Net operating income: $65‚674 House of Pianos‚ Inc.‚ purchases pianos from a well-known manufacturer and sells them at the retail level. The pianos sell‚ on the average‚ for $3‚300 each. The average cost of an piano from the manufacturer is $1‚492. The costs that the company incurs in a typical month are presented below: |Costs |Cost Formula
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1. Which of the following persons would occupy a line position in a department store? I. Sales manager II. Manager‚ furniture department III. Manager‚ advertising department IV. Manager‚ personnel department A) Only I B) Only I and II C) Only I‚ II‚ III D) I‚ II‚ III‚ IV 2. The benefits of a successful Just-In-Time system include all of the following except: A) funds tied up in inventories are released for use elsewhere. B) inventory buffers are increased
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since it has no contribution to overheads whereas a lower price above variable costs would have some positive contribution to the fixed costs and therefore improve profitability for the division. He believes a price of $40 is insufficient to cover the total costs and that the systems division does not want to subsidize the overheads of outside buyers. What decisions will each of these approaches lead to? Evaluate the decisions. 2) If you were the responsible manager at the ASIC Division
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1 Joe’s pizza parlor is attempting to minimize total inventory cost. The cost of each pizza is $1.25. The cost of capital is 18% and the physical cost of maintaining his pizza inventory is currently running at 2% of cost. Joe pays his secretary/bookkeeper $7.50 per hour. Joe’s secretary can place an order in 15 minutes with materials and overhead cost of $15.00 per order. Records show‚ weekly pizza sales as follows: Weekly Pizza Sales Week Sales(units) 1 475 2 515 3 525 4 500 5 485
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Part 1: (Theory) Brave Brands Marketing is a well-renowned marketing organization with a strong workforce of dedicated employees. However‚ the CEO has recently identified that many of his staff members have a poor understanding of financial statements and difficulty in interpreting financial data as their tertiary education has not exposed them to such information. (Brian ‚2008) As an ADSM graduate‚ you have been asked to do research which will enable you to answer the following questions in preparation
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