divided by the total number of individuals in the group n. This provides an estimate of the parameter p‚ the proportion of individuals who support the candidate in the entire population. The binomial distribution describes the behavior of a count variable X if the following conditions apply: the number of observations n is fixed‚ each observation is independent and represents one of two outcomes ("success" or "failure") and if the probability of "success" p is the same for each outcome. If these
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fixed cost plus variable cost. This concept is further explained by the the following equation: [Break even sales = fixed cost + variable cost] The break even point can be calculated using either the equation method or contribution margin method. These two methods are equivalent. Equation Method: The equation method centers on the contribution approach to the income statement. The format of this statement can be expressed in equation form as follows: Profit = (Sales − Variable expenses) − Fixed
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Profit. This knowledge is not sufficient for management for discharging the functions of planning and control‚ etc. The cost is further divided according to its behavior‚ i.e.‚ fixed cost and variable cost. The age-old equation can be written as: Sales - Cost = Profit or Sales - (Fixed cost + Variable Cost) = Profit. The relevance of segregating costs according to variability can be understood by a very simple example of a shoe-maker‚ whose Cost data for a particular period is given below:
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Cost data that are classified and reported in a particular way for one purpose may be inappropriate for another use. 2.6 Fixed costs remain constant in total across changes in activity levels‚ whereas variable costs change in proportion to the level of activity. Examples are: Fixed costs Variable costs Salaries of permanent staff Casual staff salaries will vary with forecast demand and the need to cover permanent staff leave arrangements Depreciation of buildings and equipment Paper and postage
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Calculate the variable costs per order received at a trade show and the variable costs per order received through a sales rep? For each order received at a trade show‚ the variable cost can be determined as follow: Manufacturing cost for necklace | $8.05 | | Number of necklaces | 25 | | | Sub-total | $201.25 | Manufacturing cost for a pair of earring | $5.50 | | Number of pairs of earrings | 12 | | | Sub-total | $66.00 | Shipping cost | | $15 | | Total variable cost | $282
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Check Week 2Results Concepts Marginal Revenue‚ Marginal Cost‚ and Production Marginal Productivity Mastery 100% Questions Score: 12/14 1 2 3 7 100% 4 5 6 9 11 Average Total Cost 0% 8 10 Fixed and Variable Costs 100% 12 13 14 Concept: Marginal Revenue‚ Marginal Cost‚ and Production Concepts Marginal Revenue‚ Marginal Cost‚ and Production Mastery 100% Questions 1 2 3 7 1.Purely competitive firms increase total revenue
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------ ------ Machine hours required per unit 2.5 3.0 Standard cost per unit: Direct material $ 2.25 $ 3.75 Direct labor 4.00 4.50 Manufacturing overhead: Variable (See Note 1) 2.00 2.25 Fixed (See Note 2) 3.75 4.50 ------ ------ $12.00 $15.00 ======
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CHAPTER 5: COST THEORY Overview of Huxley Maquiladora Huxley Manufacturing Company‚ a large firm in the defense industry‚ is considering a strategic move to shift production from its California plant to Mexico. Tariff reductions made possible by the North American Free Trade Agreement (NAFTA) opened up the potential to enjoy significant cost savings by shifting production south of the Mexican border. Huxley is considering three options. The simplest option is to negotiate a subcontracting
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Reduction After 5% Reduction Per Unit Total Per Unit Total Sales Revenue $ 400 $ 6‚000 $ 380* $ 6‚612* Variable Costs: COGS: Compressor 70 1‚050 70 1‚218 Other Direct Material 37 555 37 643.80 Direct Labor 30 450 30 522 Variable Overhead 45 675 45 783 Total COGS 182 2‚730 182 3‚166.80 Variable Selling 18 270 18 3‚13.20 Total Variable Costs 164 3‚000 200 3‚480 Contribution Margin $ 236 $ 3‚000 $ 180 $ 3‚132 *in thousands of dollars *$400
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Chapter 8 Review Questions and Exercises. Completion Statements 1. The variable overhead flexible-budget variance subdivides into which two variances? Spending Variance and efficiency Variance. 2. To compute the budgeted variable overhead cost rate for a manufacturing company divide budgeted variable overhead costs by the budgeted quantity of the Cost allocation base. 3. To compute the budgeted fixed overhead cost rate for a manufacturing company‚ divide budgeted fixed overhead costs by the
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