Question A What approach should be used to calculate the breakeven point of a company that has many products? Question B How is the contribution margin per unit of limited resources computed? Week 4 Discussion Questions Question A What approach should be used to calculate the breakeven point of a company that has many products? Question B How is the contribution margin per unit of limited resources computed?Indirect labor is a variable cost because it increases in total directly and proportionately
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business in order to stay successful and competitive. 5.4) a. Contribution margin is the difference between unit price and the variable cost rate or per – unit revenue minus per –unit variable cost. b. The economic meaning of contribution margin is the profit that is left after fixed costs is covered. 5.5) a. The break even equation is total revenues – total variable costs – fixed costs = profit. b. The role that contribution margin play in the volume of the break even equation is the pre unit
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Christopher Dark ACC350-1302A-04 Phase 2 Project In managerial accounting there are two types of cost information, variable and fixed costs. Variable costs are costs that change when some variable used in the cost to produce a product changes. For example if you were in the business of producing knives, then the price of the metal used to manufacture those knives would be your variable cost. Another variable cost that has to be accounted for in the cost of manufacturing is labor costs and
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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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Production, Stock and Turnover: Manufactured goods: Hair Oil:Sales) Selling Price, per unit Liter= 338.55289 1.8 Contribution Margin per unit Liters = Selling Price per unit1.7 – Variable Costs per unit 1.6 = 173.45 1.9 Assuming that the average cost is almost constant for all the SKUs we get an approximation of the cost, selling price of the product and the per unit contribution. There for a 300 ML bottle, for which we
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administrative salaries would have TFC of $40,000. Next, calculate the contribution margin per unit by subtracting the variable cost per unit from the sales price per unit. For example, if a small company's product sells for $60 per unit with variable costs per unit of $20, the contribution margin per unit would be $40. Then, plug the TFC and contribution margin figures into the formula: BEP (in units) = TFC/contribution margin per unit. In this example, the small company's BEP would equal $40,000/$40
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(Variable cost per unit x N) = Fixed cost + Profit (Contribution margin per unit x N) = Fixed cost + Profit N = (Fixed cost + Profit) ÷ Contribution margin per unit N = ($750,000 + $200,000) ÷ ($57 − $32) = 30,000 units Break-even dollars = $57 x 30,000 units = $1,710,000 b. N = ($750,000 + 21,000) ÷ ($57 − $32) = 38,000 units Sales in $ = $57 x 38,000 = $2,166,000 Exercise 3-2B N = Number of units to break-even N = Fixed cost ÷ Contribution margin per unit N = $84,000 ÷ ($78 – $43) N = 2,400 units
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Name _______________ (Please include your name in the file.) I. Classifications (30 points total) Part A: Classifications (2 points each – 22 points total) Determine the classification for each cost item based on 2 different schemes. First, determine cost behavior: whether the cost is variable or fixed (relative to the number of units produced); check the appropriate space. Then, determine whether the cost is a product or a period cost; check
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tolerable? Relative Sales Change=-Price ChangeOriginal Contribution Margin+Price Change Relative Sales Change=-24-2020-8+24-20=-412+4=-416=-0.25 Iso-Contribution Sales Quantity Change=-0.25*2000=-500 A calculation check can be done using the managerial income statement: Managerial Income Statement | | | New Situation | Revenues | | 24 * 1500 = | | 36000 | Total variable costs | | 8 * 1500 = | | (12000) | Total Contribution | | (24 - 8) * 1500 = | | 24000 | Total fixed costs
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The contribution margin per haircut is $2.50. Subtract the variable cost, which is the hourly rate for each worker from the unit price of a haircut. $12-$9.90=$2.50. The breakeven point by definition is the sales level at which a company neither earns a profit nor incurs a loss. To find the brat even point all a business manager needs to do is divide the contribution margin per unit into fived costs. You must find the fixed cost first. To find the fixed cost you subtract the total variable cost
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