units/volume B = Breakeven volume TC = Total cost P = Unit (selling) price FC = Fixed cost VC = Variable cost; TFC = Total Fixed Cost TVC = Variable Cost/Unit Revenue/period = n P TC/period = n VC + FC Profit/Loss = Revenue - TC = n P - (n VC + FC) = n (P - VC) - FC At BEP, Profit = 0 ==> 0 = n (P - VC) - FC or n = FC P - VCChapter 5: Revenue and Cost Analysis 10/19/98 6 ❍ P - VC is called contribution margin (CM), ❖ The difference between selling price and variable costs. It is
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of an individual decision maker. 3. Alton Company produces metal belts. During the current month, the company incurred the following product costs: Raw materials $100,000 Direct labor $75,000 Electricity used in the Factory $25,000 Factory foreperson salary $3,750 Maintenance of factory machinery $2,000 Alton Company's total product costs: A. $175,000. B. $30,750. C. $205,750. D. $28,750. Particulars Amount Raw materials $ 1,00,000 Direct labor $
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break-even analysis help the company decide whether to alter the existing product emphasis? What can the company afford to invest for additional “C” capacity? 4. Why is the sum of the three break even analysis volume from Exhibit 3 not equal to the 1,100,000 units aggregate break-even volume? 5. Is this type of analysis of any value? For what can it be used? Facts Bill French was a staff accountant for six months at Duo-Products Corporation. As a staff accountant he was reported directly to
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Cost management lecture slide summary Lecture 1 Reasons for US growth 1977-‐2007: end of cold war; China; spread of Internet; Financial deregulation and easy. Business inputs: land; material; labour; capital; enterprise; technology. Business decisions bound inputs with outputs Output: goods, service, information and data
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standard for management accountants Cost terminology and concepts Cost objects, cost flows in manufacturing or services operations. Job order costing and process costing Activity based costing and management Cost behavior and analysis—absorption vs. variable costing, cost driver analysis, statistical cost estimation, CVP analysis using contribution margin approach. Profit planning and budgeting Cost analysis for tactical decision making
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sales fluctuations. Currently the costs of operation include prime costs (which are labor and material costs that vary with quantity of production), production overhead costs (which include both fixed and variable elements), and selling and general expenses costs. Of the total production overhead budget it is estimated that the variable costs are equal to 25% of the prime costs. Projections for the month of January showed that the company should produce a profit of $20,000. However sales goals were
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000 in direct costs in 2007. These costs must be allocated to Ruger’s three revenue-producing patient services departments using the direct method. Two cost drivers are under consideration :patient services revenue and hours of housekeeping services used. The patient services departments generated $5 million in total revenues in 2007, and to support these clinical activities, they used 5,000 hours of housekeeping services. 1. What is the value of the cost pool? The value of cost pool is 100,000
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Title: Application of Mathematics Name Institution Question one Volume of figure one Volume = area * length Length = 7500M Area = area of the outer big rectangle minus the area of the curve and the smaller inner rectangle * Area of the bigger rectangle = height * width =9.6*8 =76.8 M2 * Area under the curve We use the equation y=aX2 and solve for a with x and y coordinates as (3.6, 4.2), as this are the coordinates on the peak of the curve. a=0.3240740741 Our equation is:
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chapter 1 1. we have: Cf= 55000, cv= 8, p= 21; v= 10 000 a. Total cost TC = cf + v*cv TC= 55000+ 10000*8 TC= $135000 Total revenue TR= v*p TR= 10000*21 TR=$ 21000 Profit Profit= TR-TC Profit= TR-TC P= 21000-135000 P= $ -114 000 b.Break even volume, V= cf/ (p- cv) V= 55000/ (21- 8) V= 4230.77 recap tires, 2. monthly break even volume V= cf/ (p- cv) We have Cf=
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retailers and fabricators. All these factors severely undermined Elkay’s profitability. Since Elkay kept using a traditional standard costing system and analyzed its customer P&Ls within it, managers didn’t take well actions toward the decline in profit for they knew information provided by this system were actually inaccurate and meaningless. Due to Hrudicka’s tireless efforts and successes from two pilot projects, PPD implemented the new Discrete Product Costing by adopting the time-driven ABC
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