Variable cost

2.4) The cost that a company would incur to purchase one unit of the resource used to produce a good is called the marginal resource cost. In many cases, these extra resources are the sources of labor and the costs incurred are the salaries paid to the employees. Organizations ensure that their marginal resource cost is equal to or less than the amount it takes to produce one more unit of the product. MRC= Change in total cost/Change in inputs When more units of variable inputs are used the…

cover fixed costs This is a reality check. If the number of units is very high, then may need to review costs. Breakeven = Total fixed costs/(selling price – cost of goods sold) = number of units Answer : As we assume that fixed cost of the company will be $300,000 So, In order to get breakeven point company has be implement formula as below: Breakeven = Total fixed costs/(selling price – cost of goods sold) = number of units Where; Fixed cost for the company is $300,000 Selling cost –$513080 &…

A grid will be used to coordinate locations and use x and y x coordinates to calculate the cost. The center of gravity strategy assumes the cost of travel versus the cost of distance and volume to be shipped. The center gravity strategy would provide Going, Inc more precise measurements of the ultimate costs and benefits of the selected locations to ensure the location that is selected will most benefit the customer and the production and capacity…

say whether there is dominant strategy or not. Lets assume that Marginal Revenue (MR) is equal to Marginal Cost (MC). The equation to calculate MC is= delta TC/deltaQ. Marginal cost shows the effect of change in quantity on cost. Here, we have been given the cost equation. C=900 + 60Q1 + 9Q1^2. In this equation, 900 can be considered as a fixed cost. So we would consider only variable cost. MC=dTC/dQ MC=60 + 18Q1 To calculate MR lets assume that P=MR P= 660-16Q1 When we put MR=MC, we…

58 was obtained from the budgeted production in April with the approximated direct material costs from direct materials budget. Meanwhile, the beginning finished goods balance is assumed to be $781.87. DelaSol Supply Co. does not hold a lot of finished goods in inventory from previous quarters because the company relies on their made-to-order and just-in-time inventory system which reduces its overall costs. Therefore, DelaSol only held around 20-30 inventories for each month. The $781.87 is…

The variable cost is $1 per flange for materials, and $2 per flange ($20 per hour divided by 10 flanges per hour) for direct manufacturing labor. 2. The inventoriable (manufacturing) cost per unit for 5,000 flanges is $3 × 5,000 + $20,000 = $35,000. Average (unit) cost = $35,000 ÷ 5,000 units = $7 per unit. This is below Fred’s selling price of $8.25 per flange. However, in order to make a profit, Graham’s Glassworks also needs to cover the period (non-manufacturing) costs…

1.1 Purpose The purpose is to analyse an issue regarding the cost allocation among divisions and how to better allocate the maintenance service cost internally and enhance the efficiency and motivation of their performance. 1.2 The issue The method provided by Johnson leads issue to the Delta Division because it cannot be implemented in an optimal manner. Additionally, Johnson promised that the Delta Division only needed to pay $10,000 monthly after the conversion of its maintenance service…

Introduction Cost can be defined as the amount that has to be paid in order to get something. In companies or industries cost is valuation of effort, resources, material, time spent, risks incurred and opportunity in production and delivery of goods. Cost accounting is also considered as cost volume profit analysis. This model is useful elementary instruction and for making short run decisions. Cost accounting is process of finding cost for the production of fixed cost and variable cost. By…

being much lower than budgeted. Other factors could be discussed here––for example, it seems that the PalmKid did not achieve much success with a three digit price point––selling price was budgeted at $149 but dropped to $102. At the same time, variable costs increased. This could have been due to a marketing push that did not succeed. 14-33 (20 min.) Market-share and market-size variances (continuation of 14-32). 1. Worldwide Aussie Info. Market share Actual Budgeted 500,000 400,000…

2002, 2003, and 2004. All 3 years are above average percentile at above 0.6. “A private nonprofit human service agency with a general and management/expense ratio greater than .35 should probably start thinking about ways of reducing administrative costs (Martin, 2001, p. 58)”. In 2002 the record shows that the general management and expense was 0.30, in 2003 it was 0.28, and in 2004 it was 0.23 which tell us that there is no need for concerns since it have not passed the 0.35 mark.…