how does the contribution margin pricing method differ from ratio pricing method?

Q: Define and explain the contribution margin ratio.

A: Contribution Margin: It is defined as the difference between the sales and the variable cost. In…

Q: How do you calculate contribution margin?

A: The contribution margin can be calculated by deducting the variable cost from the sales revenue.

Q: What is the difference between price and cost? Is there any relation connected them? Which one is…

A: PRICE  1. Price is what you pay for purchasing goods or availing the services. Also called sale…

Q: What is the variable cost and indirect cost?

A: Variable costs are costs that changes with level of activity. If activity level increases, then…

Q: ost flow methods and assumptions. What

A: The different cost flow methods and assumptions are as follows: FIFO LIFO Weighted average

Q: Define and explain the contribution margin.  Include the difference in fixed and variable costs in…

A: Contribution margin may be defined as the amount of profit generated when only the cost of goods…

Q: What is the contribution margin percentage?

A: Contribution Margin: The Contribution Margin is also can be treated on a gross or per unit basis.…

Q: What are some factors that affect variable costs?

A: Variable costs: A variable cost is a business expenditure that varies in proportion to manufacturing…

Q: Why is there a need to separate mixed cost as to variable & fixed cost?

A: Variable cost: these are the costs which vary with the units produced. These costs increase by…

Q: What effect do minor deviations from the EOQ have on totalinventory cost?

A: Minor variations from the EOQ will not in general highly affect the total inventory cost except if…

Q: What can be the Direct-Variable Costs? Explain. What can be the Direct-Fixed Costs? Explain. What…

A: Direct variable cost are those cost incurred in line with production or for a particular product or…

Q: How can the WACC be both an average cost and a marginal cost?

A: Weighted average cost of capital is the aggregated cost of capital with respect to the weights or…

Q: Explain the difference between fixed cost and variable cost? Support your answer with examples

A: Cost:   It is the economic value of resources incurred by a firm to manufacture a product or render…

Q: What is the similarity of fixed costs with variable costs and its differences.

A: similarities and differences of fixed cost and variable cost are discussed in step 2

Q: Define variable cost and fixed cost. Give an example of each?

A: Variable Cost: Variable cost refers the cost which varies due to the change in the level of…

Q: What is the relevant range? How does fixed costs and variable costs behave outside the relevant…

A: Relevant range refers to the level of the activity which represents the maximum and minimum limits…

Q: Types of Fixed and Variable cost with the help of example and graph?

A: Costs are the total spent amount for the expenditures and for producing the goods and services.…

Q: What is a variable cost? Identify two variable costs.

A:

Q: Explain the term Variable costs?

A: Cost is the total amount that has to be paid for a product.

Q: What is the primary disadvantage of basing the costplus pricing formula on absorption cost?

A: Definition: Cost plus-pricing approach: The pricing approach used by the companies to set the target…

Q: What is the correlation between fixed, variable, and semi-variable costs??

A: Introduction:- Fixed Costs – Costs are same irrespective of the number of output produced Variable…

Q: Giving examples, distinguish between Variable cost and Fixed costs

A: Introduction: Costs: Costs are of two types: 1 ) Fixed costs 2 ) variable costs

Q: What is a relationship between fixed, variable and semi-variable cost?

A: Cost can be defined as the amount incurred upon the production of goods and services for the final…

Q: what is the definition and significance of contribution margin ratio

A: Contribution margin ratio Contribution margin ratio is also profit-volume ratio. It helps us to…

Q: Explain how the segment margin differs from the contribution margin.

A: Income statement: The financial statement which reports revenues and expenses from business…

Q: What are the advantages and disadvantages of target pricing versus cost-based pricing?

A: Advantages of target pricing are as follows: It help in controlling in cost It provide profit with…

Q: How is contribution margin calculated? What about contribution margin ratio? Aren’t they the same…

A: Subtracting the selling price per unit from the variable cost per unit yields the contribution…

Q: How is contribution margin calculated?

A: Contribution margin means sales revenue over and above the variable costs of production and selling…

Q: What is the weighted average contribution margin percentage?

A: Contribution margin ratio of the business shows ratio of contribution margin with sales revenue of…

Q: What does the Unit contribution margin express?

A: Break Even Point:                 Break Even Point is defined as the level where there is no profit…

Q: How are absorption costing and variable costing the same? How are they different?

A: Absorption Costing: "Absorption costing is a method that allocates "direct labor, direct materials,…

Q: What does the Contribution margin equation express?

A: Break Even Point:                 Break Even Point is defined as the level where there is no profit…

Q: What is the relationship among fixed costs, contribution margin, and thebreak-even point?

A: Fixed costs: These are the costs incurred by the organization irrespective of the volume of…

Q: cost benefit model

A: The benefit under the cost-benefit model is calculated by deducting the associated cost from the…

Q: If fixed costs increase, what would be the impact on the (a) contribution margin?

A: Fixed cost means the cost which do not vary with the level of output where as variable cost will…

Q: Which of the following is NOT considered in cost-volume-profit analysis?

A: Answer: opportunity costs.

Q: Express the two ways of contribution margin?

A: Contribution margin is the difference between the sales revenue and the variable costs.

Q: Discuss the relationship between fixed costs, variable costs and risk.

A: 1. Fixed cost Fixed assets are assets that are used in an organization for the purpose of long-term…

Q: what consequences can broad averaging have on costs?

A: Broad Averaging: Broad averaging is also known as peanut butter cost is a costing approach of…

Q: What can be the Direct-Variable Costs?

A: Fixed cost means the cost which do not vary with the level of output. Variable cost means the cost…

Q: Are variable costs always relevant costs? Explain.

A: