The following costs have been estimated based on sales of 30,000 units: Total Annual Costs Percent That Is Variable Direct materials $ 300,000 100 % Direct labor 250,000 100 % Manufacturing overhead 250,000 50 % Selling and administrative 150,000 25 %What selling price (rounded to two decimal places) will yield a contribution margin of 40%? $43.75 $59.38 $39.58 $33.25
The following costs have been estimated based on sales of 30,000 units: Total Annual Costs Percent That Is Variable Direct materials $ 300,000 100 % Direct labor 250,000 100 % Manufacturing overhead 250,000 50 % Selling and administrative 150,000 25 %What selling price (rounded to two decimal places) will yield a contribution margin of 40%? $43.75 $59.38 $39.58 $33.25
Chapter6: Activity-based, Variable, And Absorption Costing
Section: Chapter Questions
Problem 14EA: Cool Pool has these costs associated with production of 20,000 units of accessory products: direct...
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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The following costs have been estimated based on sales of 30,000 units:
What selling price (rounded to two decimal places) will yield a contribution margin of 40%?
| Total Annual Costs | Percent That Is Variable | ||||
| Direct materials | $ | 300,000 | 100 | % | |
| Direct labor | 250,000 | 100 | % | ||
| Manufacturing overhead | 250,000 | 50 | % | ||
| Selling and administrative | 150,000 | 25 | % |
|
$43.75
|
||
|
$59.38
|
||
|
$39.58
|
||
|
$33.25
|
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