fixed cost and the variable cost of books while calculating the total cost. Finally‚ they overlooked the possible increase in the annual capacity of processed donations that would result from hiring additional employees. To correct these errors‚ I revised the cost schedules and the income statements for both before and after acquiring additional funds. I decided to use the contribution approach because I believe that it will be more relevant to separate the fixed cost and the variable cost‚ since they
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cost for a new project at $100‚000 and a variable cost of $5 per unit. Based on these calculations‚ the low-volume project would not be profitable. She shares her dismay with Nina Smythe‚ another manager. Nina strongly advises her to revise her estimates. She points out that several of the costs that had been classified as fixed costs could be considered variable‚ since they are mixed costs. When the data has been revised classifying those costs as variable costs‚ the project appears viable. Part
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Two potential problems that should be avoided in relevant cost analysis are: 1. 2. Do not assume all variable costs are relevant and all fixed costs are irrelevant. Do not use unit-cost data directly. It can mislead decision makers because a. it may include irrelevant costs‚ and b. comparisons of unit costs computed at different output levels lead to erroneous conclusions 11-6 No. Some variable costs may not differ among the alternatives under consideration and‚ hence‚ will be irrelevant. Some
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EXERCISE 3–1: Process Costing and Job-Order Costing [LO1] Which method of determining product costs‚ job-order costing or process costing‚ would be more appropriate in each of the following situations? * a. An Elmer’s glue factory. * b. A textbook publisher such as McGraw-Hill. * c. An Exxon oil refinery. * d. A facility that makes Minute Maid frozen orange juice. * e. A Scott paper mill. * f. A custom home builder. * g. A shop that customizes vans. * h. A
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contains prize. (b) Explain the rolling of a fair die and then flipping of a fair coin with the help of tree diagram. Q.2 (a) How can we differentiate between continuous and discrete random variables. Explain with the help of examples. (b) Let X be a random variable having normal distribution with mean 48 and standard deviation 10. Then find [pic]. Q.3 (a) Compute the mean‚ median‚ mode and standard deviation for the following discrete probability distribution. |Value
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20 per kg‚ R costs 20 paisa per kg and empty bag costs 80 paisa each 4. It requires 9 minutes of direct labour time to produce and fill one bag of P. Labour cost is Rs 5 per hour. 5. Variable manufacturing costs are Rs 0.45 per bag. Fixed manufacturing costs are Rs 30‚000 per quarter. 6. Variable selling and administration expenses are 5% of sales‚ and fixed administration and selling expenses are Rs 25‚000 per quarter. 7. Stock levels are planned as follows: Beginning
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1. Service Cost Allocations CLASS: Teck Tecky Water Services provides water for Departments A‚B and C and has prepared its total budget using the following information for the next year:- Fixed Costs $300‚000 Budgeted Gallon Usage:- Variable Costs $0.10 per gallon Dept. A 2‚500‚000 gallons Available capacity 10‚000‚000 gallons Dept. B 2‚000‚000 gallons Dept C 1‚500‚000 gallons Instructions: Assuming that the single-rate method is used and the allocation base is budgeted
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the Cost Volume Profit Analysis (CVP). Cost Volume Profit analysis is generally defined as a planning tool which can evaluate the effect of a change(s) in price‚ volume‚ variable cost or fixed cost on profit. In CVP analysis an attempt is made to measure the variations of cost and profit with volume. Profit as a variable is the reflection of a number of internal and external conditions which exert influence on sales revenue and costs. Accountants often perform CVP analysis to plan future levels
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Chapter: 1 Facility Location Models 1.1 Introduction Facility Location is a geographic location of manufacturing/service facilities where transformation activities from inputs into the output are performed. Selecting a location of facilities is very crucial decision not only for manufacturing unit but also for service unit. Generally it is a strategic decision and involves lot of activities. It starts from identifying the suitable locations based on certain criteria and then evaluating all locations
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control is of utmost importance to managers in order to decisions. In this study‚ we took a look at the traditional cost behavior models such as variable cost (which changes in line with activity)‚ fixed cost (which is not proportionate with the level of activity)‚ and semi- variable cost which is also known as mixed cost (which have both features of the variable and fixed cost). Furthermore‚ cost estimation techniques were also looked at and the advantages and disadvantages of each method outlined. We
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