Essays Tagged: "variable costs"

Analysing costs, profits and break even point.

ms of output, time or product. When we speak of costs in terms of output and time we mean FIXED and VARIABLE costs. Remember fixed costs do not vary with output, whilst variable do. The TOTAL costs of ... ixed costs do not vary with output, whilst variable do. The TOTAL costs of a firm are its fixed and variable costs added together. We also need to remember that we borrow something from economists whe ...

(4 pages) 279 1 4.5 Nov/2002

Subjects: Businesss Research Papers

What are costs?

when it produces and we split these in various ways. One way is to split them into fixed costs and variable costs:·Fixed costs - these are costs that do not vary as the level of production var ... of production varies. These include such things as rent, business rates and security costs.·Variable costs - these are costs that do vary as output varies and so will include things like raw m ...

(1 pages) 92 0 3.0 Nov/2002

Subjects: Businesss Research Papers

Critically appraise the use of break-even analysis when used in a company with a number of different products!

and selling price on profitability. It illustrates the relationship between output, sales revenue, variable and fixed costs and profit. A business breaks even when contribution (sales - variable cost ... over which is necessary to break-even. For the sake of completeness, a company can also use average variable cost and sales turnover to calculate contribution for a multi product mix.Underlying this c ...

(2 pages) 200 0 3.9 Jan/2004

Subjects: Businesss Research Papers > Accounting

The use of marginal costing techniques for managerial decision making ignores important commercial factors. Discuss this statement including relevant examples to support your argument.

The cost of a product under marginal costing or variable costing includes only the variable costs of making the product. The variable costs include ... variable costs of making the product. The variable costs include direct material, direct labour and variable overheads. Variable costs per unit approximate the marginal cost of making another unit of ... sts per unit approximate the marginal cost of making another unit of a product. Selling price minus variable costs adds up to contribution. Contribution is the amount of money available to cover the f ...

(2 pages) 21464 0 4.5 Jan/2004

Subjects: Businesss Research Papers > Accounting

What is the best theoretical method of allocating underapplied or overapplied overhead, assuming that the objective is to obtain as accurate a cost application as possible?

overhead. "The use of absorption costing to provide quotes for jobs takes account of both fixed and variable costs. (1) Material and direct labor costs are debited to the 'Work in Process' inventory. ... tually incurred.When a predetermined overhead rate is used, it is assumed that the overhead cost is variable. (3) Another approach is to allocate the under- or overapplied balance to Cost of Goods Sol ...

(2 pages) 104 1 3.3 Aug/2004

Subjects: Businesss Research Papers > Accounting

Gross Margin Analysis

ir information system.A gross margin can be defined as the gross income from an enterprise less the variable costs incurred in achieving it.Gross margins are predominantly used to compare enterprises ... it provides a guide to estimating a gross margin.A gross margin is the value of enterprise less the variable costs for a given enterprise. This allows a comparison to be made between enterprises, eg: ...

(5 pages) 78 0 3.0 Aug/2005

Subjects: Businesss Research Papers > Accounting

Baldwin Bicycle Company Case Study

re as listed in the 1982 income statement, what is the amount of total manufacturing costs that are variable?3. What are the variable manufacturing costs per unit for the standard Baldwin bicycle?4. W ... per unit for the standard Baldwin bicycle?4. What is the per unit contribution margin (sales price -variable costs) of the standard Baldwin bicycle. Assume that $5 per unit of selling costs are variab ...

(6 pages) 339 0 3.4 Jul/2006

Subjects: Businesss Research Papers > Case Studies

Planning and Budgeting

00. Using this data, I found the following information.1. Contribution margin is sales revenue less variable costs. It is the amount available to pay for fixed costs and provide any profit after varia ... have been paid. (Wikipedia, 2006) Find the contribution margin per haircut:Unit sales price - unit variable cost = contribution margin12.00 Per cut - 0.40/shampoo = contribution margin$11.60 = contri ...

(2 pages) 67 0 4.0 Aug/2006

Subjects: Businesss Research Papers > Accounting

Marketing Plan: Phase III - Drive Alert, by eMagin, Inc.

nd internal factors will influence eMagin's expected target market. Pricing strategies will examine variable costs including channel members participation, and organizational profitability.Attributes ...

(7 pages) 557 1 4.2 Feb/2007

Subjects: Businesss Research Papers > Case Studies

Productivity and Cost Paper

tegic changes. These changes will be based on productivity, wages and benefits, and other fixed and variable costs. Further more I will incorporate the law of diminishing marginal productivity and the ... at the merchandise within the store.Law of Diminishing Marginal Productivity As more and more of a variable input is added to an existing fixed input, eventually the additional output one gets from t ...

(4 pages) 193 0 0.0 Mar/2007

Subjects: Social Science Essays > Economics

Management Accounting: Fixed and Variable Costs

I.Assignment InstructionsCosts can be classified into two categories, fixed and variable costs. These costs behave differently based on the level of sales volumes. Suppose we are r ... nual Cost: 650Item: Building RentTotal Annual Cost: 9000Identify which cost item above is fixed and variable and why? What is the cost per unit of each? Suppose we increased our sales volume to 6000 u ... re still within the relevant range), what would be the total annual cost and unit cost of fixed and variable costs? (American InterContinental University, 2007)II.Assignment Detail1.Identify which cos ...

(2 pages) 182 0 3.0 May/2007

Subjects: Businesss Research Papers > Accounting

Strategy And Policy SWA

s to be offered in a market traditionally characterized by steep prices, set to compensate for high variable costs as well as high fixed operating costs. Furthermore, they would compliment their cost ...

(3 pages) 54 0 2.0 Mar/2001

Subjects: Businesss Research Papers > Case Studies

Midwest Ice Cream Company

The first step establishes standards for selling price, variable expenses, and marginal contribution per gallon. All the manufacturing cost items for each p ... xed marketing cost are added in and totaled, then added to the manufacturing cost to give the total variable costs for each unit produced. Selling price is shown and below this is the marginal contrib ...

(1 pages) 14 0 0.0 Oct/2001

Subjects: Businesss Research Papers

Planning and Budgeting

such as rent, these have to be paid even if there is no production. The second type of cost is the variable cost; this is the costs that will variable dependant in the production, the direct inputs i ... tion level per haircut. This means taking the revenue that is gained and then deducting the direct (variable) costs. This is shown in figure 1 below.Figure 1. Contribution Margin.Revenue per hair cut ...

(2 pages) 49 0 3.0 Jun/2007

Subjects: Businesss Research Papers > Accounting

Dollar General Productivity and Cost Paper

company has made. These changes will be based on productivity, wages, benefits, and other fixed and variable costs. Further more it will incorporate the law of diminishing marginal productivity and th ... t the merchandise within the store."Law of Diminishing Marginal Productivity has more and more of a variable input in added to an existing fixed input, eventually the additional output one gets from t ...

(4 pages) 90 0 3.5 Jul/2007

Subjects: Businesss Research Papers > Case Studies

ERP for Riordan Manufacturing: Project Planning and Implementation

counting system that will lead to the following advantages for Riordan- Reduction of both fixed and variable costs by 10% through reduction of wasted person-hours for ordinary finance and accounting p ... frontline support of the solution.The project must show a bottom-line net gain in both fixed and variable costs for Riordan of 10% and 15% in saved cycle timeThe management team will recognize m ...

(10 pages) 654 0 3.0 Aug/2007

Subjects: Businesss Research Papers > Case Studies

What is Management accounting?

The raw material used to make the hamburgers is an item of variable cost because the more hamburgers that are produced, the more raw materials you will have to ... ear, and we stay in the relevant range, what would the total annual cost and unit cost of fixed and variable costs?For Q = 6000The Raw Materials cost, because it is variable cost, v is constant.v = .6 ... l cost = C = V + F = 3900 + 9000 = 12900Unit fixed cost = Building Rent cost per unit = f = 1.5Unit variable cost = Raw Materials cost per unit = v = .650For Q = 8000For Raw Materials cost, since it i ...

(1 pages) 48 0 3.7 Aug/2007

Subjects: Businesss Research Papers > Accounting

Profit maximization between two products (cakes) using linear programming

nnex A and B.The time requirements for each of the two cakes, their suggested selling prices, their variable costs, and their contribution margins appear in the table below.Orange Rum CakeFruit CakeSu ... contribution margins appear in the table below.Orange Rum CakeFruit CakeSuggested Retail PriceLess Variable Costs to Produce One Unit of CakeContribution Margin per Unit P 200117.88P82.12P 350201.19P ...

(4 pages) 40 0 5.0 Sep/2007

Subjects: Businesss Research Papers > Management > Management Planning & Decision Making

Mother's Novelty Cakes (Using Linear Programming)

nnex A and B.The time requirements for each of the two cakes, their suggested selling prices, their variable costs, and their contribution margins appear in the table below.Orange Rum CakeFruit CakeSu ... contribution margins appear in the table below.Orange Rum CakeFruit CakeSuggested Retail PriceLess Variable Costs to Produce One Unit of CakeContribution Margin per Unit P 200117.88P82.12P 350201.19P ...

(4 pages) 15 0 5.0 Sep/2007

Subjects: Businesss Research Papers > Management > Management Planning & Decision Making

Conditions and Consequences of a Price War.

t manage to increase volume enough to cover the fall in contribution then it will fail to cover its variable costs and will be forced to leave the market. Other firms may recognise that the company is ... ombat lower prices. But, other firms will not have such efficiencies and will not be able to afford variable costs and will therefore exit the market immediately (see appendix item E).The long-run aff ...

(6 pages) 25 0 0.0 Nov/2007

Subjects: Businesss Research Papers > Markets & Exchanges