prepared using a contribution format. The annual report says that the contribution format income statement shown on page 33 is used for internal reporting purposes; but, Benetton has chosen to include it in the annual report anyway. The contribution format income statement treats all cost of sales as variable costs. The selling, general and administrative expenses shown on the absorption income statement have been broken down into variable and fixed components in the contribution format income statement
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prepared using a contribution format. The annual report says that the contribution format income statement shown on page 33 is used for internal reporting purposes; nonetheless, Benetton has chosen to include it in the annual report. The contribution format income statement treats all cost of sales as variable costs. The selling, general and administrative expenses shown on the absorption income statement have been broken down into variable and fixed components in the contribution format income statement
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uke ssays.co m http://www.ukessays.co m/essays/finance/berkshire-threaded-fasteners-co mpany-finance-essay.php Berkshire Threaded Fasteners Company Finance Essay In July 2000, one of the Berkshire T hreaded Fasteners Company’s competitors Bosworth announced a price reduction on the 100 series f rom $2.45 to $2.25 per 100 pieces. As the prof it and loss by Product f rom January 1 to June 30, 2000, the reduction of the unit sales price of Series100 f rom $2.45 to $2.25 would mean that the unit
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Zumwald AG case Zumwald produced and sold a range of medical diagnostic imaging systems, biomedical test equipment and instrumentation. The firm has a divisional structure and a highly decentralized basis. Managers of each division have lot of autonomy in decision-making and they are compensated based on achievement of budgeted targets and ROIC. Moreover, Zumwald is vertically integrated (some divisions produce components that are essential to the others). Thus three divisions involved
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B. Consider Model C210 and Model D400 chisels. Which product should be emphasized if the constraint in coating and sharpening cannot be loosened? Selling Price Less Variable Costs: Direct Labor $ 85 Direct Material $150 Variable Overhead $ 15 Contribution Margin Less
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Paper Company Contribution Margin by Product Line Computer Paper Contribution Margin = Selling Price - Variable Cost CM = $14 - $6 = $8.00 per unit. Total contribution margin = $8.00 x 30,000 units = $240,000 Napkins Contribution Margin = Selling Price - Variable Cost CM = $7 - $4.50 = $2.50 per unit. Total contribution margin = $2.50 x 120,000 units = $300,000 Place Mats Contribution Margin = Selling Price - Variable Cost CM = $12 - $3.60 = $8.40 per unit. Total contribution margin = $8
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units × 1.15 = 23,000 units) | $345,000 | $ 15.00 | | Variable expenses | 207,000 | 9.00 | | Contribution margin | 138,000 | $ 6.00 | | Fixed expenses | 70,000 | | | Net operating income | $ 68,000 | | | | | | 2. | Sales (20,000 units × 1.25 = 25,000 units) | $337,500 | $13.50 | | Variable expenses | 225,000 | 9.00 | | Contribution margin | 112,500 | $ 4.50 | | Fixed expenses | 70,000 | | | Net operating income | $ 42,500
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evident in the changes of their overhead rates from 1988 to 1989 as there were fewer variable costs in the denominator. 3. Should Gerald Kelly even be concerned with the allocation of fixed overhead costs to the cartridges? Why not use variable contribution margin (selling price minus variable costs) for decision making and reporting to the board of directors and analysts? • Selling price of $150 • Reserve capacity • Bad for long-term decisions as the fixed costs need to be covered to make profit
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Question 1 $2.70 per machine hour ($338,580 ÷ 125,400). Units completed and transferred out + equivalent units of ending work in process materials = Equivalent unit of production Materials Units Completed and Transferred out conversion costs + Equivalent Units of work in process conversion costs = Equivalent units of production conversion costs Compute the direct materials used for the period, which is equal to the beginning inventory plus material purchases minus ending inventory. Read
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we purchase 50 packets, the supplier will charge us $35.50 ($25 for the product and $10.50 for the shipping), which makes the cost to be $0.71 per packet. So, $1.50 may be an ideal price that we charge for our customers. By using this price, our contribution margin will be $0.79 per bar ($1.50 per bar – $0.71 per bar), and we need to sell 1,137 packets ($898.00 / $0.79 per packet) to cover the price of the vending machine. After covering the initial investment, our monthly break-even point will be
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