cost accounting 2
1/ Variable Costs: The variable cost will be 40% higher [ an increase of 21,000 - 15,000=6,000 units] Direct Material used 1,060,000 Variable Costs: Direct Labor 1,904,000 Direct material used [ 1,060,000 *1.4] 1,484,000 Unit costs [ 6,335,600 / 21,000] =$ 301.7 Indirect Materials and supplies 247,000 Direct Labor [ 1,904,000 * 1.4] 2,665,600 Variable Cost/ Unit = 228.27 at both 15k & 21k units Power to run plant eqip 213,000 Indirect Materials and supplies [247,000 * 1.4] 345,800 Total Variable Cost @ 15k units =
Fixed Cost: Power to run plant eqip [ 213,000 *1.4] 298,200 1,060,000+1,904,000 + 247,000+ 213,000 = 3,424,000 Supervisory salaries 926,000 Total Variable Cost 4,793,600 Unit Variable Cost = 3,424,000/15k units or Plant Utilities 281,000 Fixed Costs: 4,793,600/21k units = $228.27/unit Depreciation on P&P(S-L, time basic) 141,000 Supervisory salaries 926,000 Property tax on building 194,000 Plant Utilities 281,000
Required: Unit Variable Cost and total fixed costs Depreciation on P&P(S-L, time basic) 141,000 are expected to remain unchanged next month. Property tax on building 194,000
Calculate unit cost and total cost if 21,000 units Total Fixed Costs 1,542,000 are produced next month. Total Cost for 21,000 units 6,335,600
2/ The Dollar Store’s cost structure is dominated by variable costs with a contribution margin ratio of 0.45 and fixed costs of $119,700. Every cost structure of a competitor, One-Mart, is dominated by fixed costs . with a higher contribution margin ratio of 0.80 and fixed costs of $319,200. . Both companies have sales of $570,000 for the month.
(a)
Compare the two companies’ cost structures
Fixed Cost: Power to run plant eqip [ 213,000 *1.4] 298,200 1,060,000+1,904,000 + 247,000+ 213,000 = 3,424,000 Supervisory salaries 926,000 Total Variable Cost 4,793,600 Unit Variable Cost = 3,424,000/15k units or Plant Utilities 281,000 Fixed Costs: 4,793,600/21k units = $228.27/unit Depreciation on P&P(S-L, time basic) 141,000 Supervisory salaries 926,000 Property tax on building 194,000 Plant Utilities 281,000
Required: Unit Variable Cost and total fixed costs Depreciation on P&P(S-L, time basic) 141,000 are expected to remain unchanged next month. Property tax on building 194,000
Calculate unit cost and total cost if 21,000 units Total Fixed Costs 1,542,000 are produced next month. Total Cost for 21,000 units 6,335,600
2/ The Dollar Store’s cost structure is dominated by variable costs with a contribution margin ratio of 0.45 and fixed costs of $119,700. Every cost structure of a competitor, One-Mart, is dominated by fixed costs . with a higher contribution margin ratio of 0.80 and fixed costs of $319,200. . Both companies have sales of $570,000 for the month.
(a)
Compare the two companies’ cost structures