An Analysis Of The Bird Feeder Division At Mde Essay

New Contribution Margin = New Price per unit – Variable cost per unit =$8.5-$2.5 =$6

Q2. Using budget data, what was the total expected cost per unit if all manufacturing and shipping overhead (both variable and fixed) was allocated to planned production? What was the actual per unit cost of production and shipping?

1. For financial accounting purposes, what is the total amount of product costs incurred to make 10,000 units?

are costs that have already been incurred and cannot be changed by any decision made

The product cost per unit under absorption costing is $15.00 and under variable costing are 10.60.

In this case, you will be able to cover all of your fixed costs only by changing of sales mix, without changing the prices. Please keep in mind that you have some more variable operating costs, not covered by this calculation (see Table on p. 2). They can amount to more than $1,000, if you add depreciation for equipment and truck.

* Calculated correctly—No. The correct calculation would equal what the material can be sold for at the current market value: 25,000 lbs x $9/per lb = $225,000

Unit contribution = Unit Price – Unit Variable Cost = $1.80 – $1.40 = $0.40

In this table, it reflects the changes in fixed plant overhead from $420,000 to $378,000. The company still has the fixed selling and administrative expense per quarter of $118,000. The new company fixed overhead is now at $496,000 from the past $538,000 ($42,000) change from past to

2.) For each expense that is variable with respect to revenue hours, calculate the cost per revenue hour.

The Kenton Company processes unprocessed milk to produce two products, Butter Cream and Condensed Milk. The following information was collected for the month of June:

How can the standard cost per ton for variable costs differ from the beginning of the year to the end of the year? I.e.: $650 per ton vs. $631 per ton.

The $320,000, on the other hand, is a fixed cost associated with the proposed addition.

I am emailing you guys in hopes that I can utilize one of your bird feeders to conduct my lab experiment. Amy said you three have been using the bird feeders leftover from the animal behavior lab last fall and that you might be willing to allow me to conduct my experiment at this site.

There are several steps to get the correct contribution impact (Exhibit 4). First, Culinarian should figure out the sales averages from march to may in. In 2004 March to May, Culinarian did the price promotion, so the data has less credibility. However, 2002 & 2003’s date can be used because there are no promotions during these periods. So, average Sales from March to May in 2002 & 2003 is 91,247 + 78,778/2 = 85,012. Next step, Culinarian should calculate the forecast units. It can base on the historical growth. The historical growth rate is 21% here. According to this way, the forecast units should be 102,865. Then, Culinarian can get the average variable costs according to consultant and sales manager’s assumption. The average variable cost is $45. This number is an estimate, based on the assumption that the consultant overestimated the cost while the sales manager underestimated the cost. Finally, Culinarian can use the formula and get its incremental contribution impact. From this method, Culinarian can have an increase by $432,169 in its contribution.