The differences between fixed costs, semi –fixed costs and variable costs deal with the amount of series provided. Fixed costs are cost that remain the regardless of volume. Semi – fixed costs are costs that are fixed with in ranges that are smaller than the relevant range. Variable costs are cost that increase and decreases with volume. 5.2) The total cost are made up of two components which are variable costs and fixed costs. 5.3) a. The cost volume profit analysis is an analytical technique
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Therefore, Manufacture’s selling price Variable Cost of X: Manufacturing Shipping Commission = = = 0.90 0.20 0.59 = per unit per unit per unit 1.69 per unit Therefore, Total Variable Costs Unit contribution of brand X = 4.21 2. Fixed Manufacturing Cost of X: Manufacturing = Advertising = Manager’s Salary = Therefore, Total Fixed Costs = Unit contribution of brand X = 9,000,000 5,000,000 350,000 14,350,000 4.21 Total Fixed Cost Unit contribution for X 3,408,551 units per year INR
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HSA 525 | Cost Behaviors and Allocation | Assignment 2 | Tomeka Lewis4/29/2012 | In today’s world of businesses and corporations, there is a common goal shared throughout every industry: increase profits. With increases in skills and developing methods, businesses have come far lengths in increasing their profits, or operating income. Controlling costs is the key to a positive operation. Executives and managerial branches are using what they know about costs to create business
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Heath. The Company recently hired a new cost accountant, Lee High, who intends to conduct a new cost analysis over a period of three production weeks. Lee wanted to better identify the fixed, variable, and semi-variable costs associated with production of Great Heath. Once these costs were categorized Lee could determine how this would affect the cost of goods sold. Lee could then develop what the break- even volume that could be generated from a changing volume of sales. The case shows the assumptions
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millions of dollar) | Static Budge | Flexible Budget | Actual Results | | | | | Revenue | $4.7 | $4.8 | $4.5 | Costs | 4.1 | 4.1 | 4.2 | Profits | 0.6 | 0.7 | 0.3 | A: Calculate and interpret the profit variance Profit variance = Actual Profit – Static Profit = $3000, 000.00 - $600,000.00 = $-300,000.00 The hospital is in the red of $300,000.00 less for profit than expected. (Unfavorable) B: Calculate and interpret the revenue variance Revenue variance = Actual Revenue – Static
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Case 24-4 Midwest Ice Cream Company (A) QUESTIONS Explain in as much detail as possible where all the numbers for Steps 1-4 would come from. (You will need to use your imagination; the case does not describe all details of the profit planning process.) We can get the numbers from the company’s records and its external environment. We can use the following from the company’s records: • Management’s short term and long term plans; • Accounting reports such as financial statements;
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may be profit or non-profit organization, organization needs information that can help guide the management in making the right decisions. How much sales revenue must be achieved in order to cover the expenses? How much volume level must be achieved to get targeted/net profit? How will the profits of an organization be affected if the sale prices/service prices change? How will the profit change if one of the products has been stopped from selling and increase another product sales volume by 30%
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undertaking and risky financial venture. Operators must be prepared to lose money, to manage fixed costs, and to do constant forecasting in order to determine how much food to prepare. The advantages and disadvantages are numerous, but we will proceed to name a few. Food trucks carry the explicit advantage of lower investment and operational costs, thereby reducing overhead and other related costs. Instead of renting or purchasing a building, a potential operator could purchase a truck, register
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Cost-Volume-Profit Analysis Objective 1 • Identify how changes in volume affect costs. Types of Costs Variable Fixed Mixed Total Variable Cost Total variable costs change when activity changes. Total Long Distance Telephone Bill Your total long distance telephone bill is based on how many minutes you talk. Minutes Talked Variable Cost Per Unit Variable costs per unit do not change as activity increases. Per Minute Telephone Charge Minutes Talked The cost per long
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The first major reason for the favorable operating income variance of $71,700 is that there have been higher sales volume than that forecasted. Essentially, higher sales volume has been responsible for the favorable operating income variance. The actual net sales are $9,657,300, whereas, the budgeted sales volume was $9,645,300. On the other hand unfavorable variance due to operations have actually decreased the favorable operating income variance by $46,000. Specifically, the major reason for the
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