December 31, 2014 | Revenues (345,400 $22 per unit) | | $7,598,800 | Variable costs | | | Variable cost of goods sold (345,400*$5.1) | $1,761,540 | | Variable marketing costs (345,400units$1.1 per unit) | 779,940 | 2,541,480 | Contribution margin | | 5,057,320 | Fixed costs | | | Fixed manufacturing costs | 1,440,000 | | Fixed operating costs | 1,080,000 | 2,520,000 | Operating income | | $2,537,320 | @FOH=$1,440,000/300,000=$4.8 Zwatch Company Income StatementFor
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be $.60 for every pound of meat it sells given an average daily sales level of 500 pounds. It charges $3.89 per pound of top-grade ground beef. The variable cost per pound is $2.99. What is the contribution margin per pound of ground beef sold? A. $0.30 B. $0.60 C. $0.90 D. $2.99 E. $3.89 Contribution margin = $3.89 - $2.99 = $.90 2. A project has an accounting break-even point of 2,000 units. The fixed costs are $4,200 and the depreciation expense is $400. The projected variable cost per unit
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as borrowing from family and from the bank. * Their initial funding has quickly depleted, therefore securing funding is an immediate priority. Slide 3. * The formula for contribution margin is the selling price of a product less its associated variable cost. * In other words, calculating the contribution margin determines the sales amount left over after adjusting for the variable costs of selling additional products. * Examples of variable costs are direct labour and direct materials
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Principles of Managerial Accounting—Fall 2013 Competencies |Competency |Description | |1 |Know difference between managerial and financial accounting. | |(Ch. 1-2) |Managerial accounting – provision of accounting info for a company’s internal users. It is the firms internal | |Q 1-6 |accounting system
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M1A3 The vision and mission statement of Livoria Sandwiches is for them to maintain their strong reputation amongst their current loyal customers for quality while maintaining a unique product. In providing a supply of a different product, Livoria is competing to some degree using a differentiation strategy which will allow Livoria to charge a premium on their products, and allow them to be competitive based upon the perceived difference they have from the rest of the market segment. The key stakeholders
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Case Differential pricing of pharmaceuticals: the HIV / AIDS Crisis 1) Is the monopoly on patented pharmaceuticals warranted? What barrier to entry prevents the re-importation into the United States of pharmaceuticals sold at lower prices abroad (say, in Canada)? The monopoly on patented pharmaceuticals is an improper term, and represents only a limited warranty. * First, it is limited in time. The company needs to recover its R&D investment and make a fair profit during the period
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Incremental cost per unit for completion 150 350 Contribution (loss) on product $(50) REQUIRED 1. Should transfers be made to Division B if there is no unused capacity in Division A? Is the market price the correct transfer price? Show your computations. Outside sales of frames: Selling price of intermediate product $200 Incremental cost per unit in Division A (120) Contribution margin per unit $80 Transfer of frames to Division
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Marginal Risk Contributions Overview This chapter focuses on marginal risk contributions, to portfolio loss volatility or to portfolio capital, and compares them with absolute risk contributions. Marginal risk contributions serve essentially for risk-based pricing with an ‘ex ante’ view of risk decisions, while absolute risk contributions are the basis for the capital allocation system. Marginal risk contributions to capital are the correct references for risk-based pricing. Pricing based
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Activity 2.5 1. Contribution margin per composite unit = 5 ($10 – 6) + 8 ($15 – 9) = $20 + $48 = $68 Total fixed costs = $500,000 CM per unit 68 = 7353 composite units Leo 7,353 5 = 36,765 units @ $10 = $367,650 Libra 7,353 8 = 58,824 units @ $15 = $882,360 Or alternatively, the average contribution margin could be calculated. Note it is 40% for both products, as follows: Leo $4 5/13 = $1.54 Libra $6 8/13 = $3.69 Average contribution margin $5.23 Total fixed costs = $500
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divisions. 2. Using the market price as the transfer price, determine the contribution margins for both the Mining division and Metals division | Mining | Metals Division | Sales Price | $90 | $150 | Less Variable costs | - | - | Transfer price | - | $90 | Direct Material | $12 | $6 | Direct Labor | $16 | $20 | Variable Manufacturing Overhead | $24 | $10 | Variable Selling costs | $5 | - | Contribution Margin | $33 | $24 | 3. If Provo Consolidated Resources Company were
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