15Q^2 + 10Q^3 a) Fixed Cost (doesn’t change depending on output produced) = 100 b) Variable Cost of producing Q = 10 units: 20*10 + 15*10^2 + 10*10^3 = 200 + 1‚500 + 10‚000 = 11‚700 c) Total Cost of producing Q = 10 units: C(10) = 100 + 20*10 + 15*10^2 + 10*10^3 = 11‚800 Alternatively‚ we have Total Costs of Producing Q=10 units = Fixed Costs + Variable Costs of producing Q = 10 units = 100 + 11‚700 = 11‚800 d) Average Fixed Cost = Total Fixed Costs / Output = 100/10 =
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accounting management system to cost its products. In 1985‚ when Carl-Erik Ridderstrale became president he developed the Kanthal 90 plan to increase overall profitability. He quickly recognized that in order to implement this plan a new account management system was needed to supplement the new strategy. In lieu of this need a new account management system was devised. Under the new cost system‚ two broad sources of costs were identified: manufacturing and SM&A. All costs within these categories were
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Required: a. Variable costs increase if output (or sales) varies; in this case‚ costs associated with processing each passenger is an absolute variable cost since there is $7 cost increase for an additional passenger. Other variable costs are the cost of flight clue and fuel costs‚ since when the number of passenger increase to a capacity that is more than 120 people‚ one additional flight would have an cost increase of $(600+210)/per hour of flying time. Fixed costs remain in constant if output
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for the year just ended. Estimated Actual Units sold 1‚000 1‚100 Direct labor hours 2‚000 2‚050 Sales Revenue $140‚000 $145‚000 Direct materials cost 30‚000 31‚000 Direct labor cost 20‚000 22‚000 Manufacturing overhead cost 60‚000 62‚000 Selling and administrative costs 20‚000 19‚000 SuperFine uses a normal costing system with direct labor cost as the allocation basis. By how much is manufacturing overhead misapplied? A) $4‚000 underapplied B) $4‚000 overapplied C) $2‚000 underapplied D)
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Worksheet # I: Cost Classification Study Questions 1. Distinguish between direct and indirect costs. 2. Distinguish between prime cost and conversion costs. 3. The current assets sections of the balance sheets of three companies follow. Which company is a service company? Which is a merchandiser? Which is a manufacturer? How can you tell? X-TREME Cash………………. $2‚500 Accounts Receivable 5‚500 Inventory………….. 8‚000 Prepaid Expenses…. 300 Total………………. $16‚800 Y-NOT? ZESTO
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variable costs are charged to cost units and the fixed costs attributable to the relevant period is written off in full against the contribution for that period. For contribution‚ is the difference between sales value and the variable cost of those sales‚ expressed either in absolute terms or as a contribution per unit (The Association of Business `Executive‚ 2009). It is assumed that M&S used marginal costing evidence in their financial statement. The proportion variable cost in the cost of sales
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Health Cruises Homework 1. What is the minimum number of passengers Health Cruises must sign up by November 20th to break even? *Fixed costs = $220‚000 (Ship rental and crew) + $65‚000(initial advertisement expense) +$10‚000(administrative expense) = $295000 *Contribution per unit = $1500 -$200 = $1300 *Breakeven point (in units)= 295000/1300 = 226.92 : At least 227 passengers should sign up for Health Cruises by November 20th.
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budget? The steps taken to develop a flexible budget are as follow: • Identify the activity index and the relevant range of activity. • Identify the variable costs‚ and determine the budgeted variable cost per unit of activity for ach cost. • Identify the fixed cost‚ and determine the budgeted amount for each cost. • Prepare the budget for selected increments of activity within the relevant range. · What information is found on a flexible budget report? Flexible
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retail stores such as Wal-Mart‚ Target‚ Home Depot‚ and Lowe’s. Greatneck’s 100 workers produce 6‚000 space heaters each month at a price of $32. The plant’s work schedule is for 20 days each month and each worker earns $70 per day while the variable cost for Greatneck is $2000 per day. Concerning the current environmental scan factors we must understand that they fall into six
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Ch.17 1. The building blocks of financial statement analysis include: Liquidity and Efficiency‚ Solvency‚ Profitability‚ Market Prospects. 2. The ability to meet short-term obligations and to efficiently generate revenues is called: Liquidity and Efficiency 3. The ability to generate future revenues and meet long-term obligations is referred to as: Solvency 4. The ability to provide financial rewards sufficient to attract and retain financing is called: Profitability 5. The ability to generate
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