What are the two components that can affect the contribution margin? Why is it important to investigate both?

Q: Discuss how contribution margin can be maximized when one factor limits productive capacity.

A: In this question, we are taking the example of a small medical. Factors that would most likely to…

Q: Are joint cost allocations useful? If they are, for what purpose?

A: Definition: Joint cost: The total costs incurred prior to the split-off point where the joint…

Q: In economic analysis we want to minimize the difference: (Benefits - Costs).

A: While conducting an economic analysis (cost-benefit analysis) the benefits must weigh greater than…

Q: analysis? What are identified as possible risks associated with cost

A: Definition: A technique for calculating the costs related to a business prospect or proposal, as…

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: What is the Contribution Margin?

A:

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: Define Contribution margin? Give three examples?

A: Contribution Margin: Contribution margin is the excess of selling price over the variable costs of a…

Q: What is the economic rationale for the cost approach? Under what conditions would the cost approach…

A: Answer: Economic rationale for cost approach: The cost approach means that the person who is…

Q: What is a cost driver?

A: A cost driver is a concept used in management accounting. The cost of specific business operations…

Q: What is the cost principle?

A: Cost Principle:Cost principle requires recording of assets and liabilities on the balance sheet of…

Q: What is meant by the term contribution margin per unit of scarce resource?

A: Decision involving limited resources:   Firms typically have resources limited in supply. For…

Q: Explain the term Variable costs?

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

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: Which costs make up “prime” costs？

A: Prime cost is that cost, which is directly concerned with the product such as direct material,…

Q: Define and distinguish between contribution margin per unit and contribution margin percentage?

A: Contribution margin is the difference between the total revenue and total variable costs of a…

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 is a standard cost? Explain? Give an example?

A: Standard Cost: Standard cost is the benchmark amount of per unit product, per unit input or per unit…

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: “All the independent variables in a cost function estimated with regression analysis are cost…

A: Cost driver: Cost driver is one of the measurements that help the company in tracing directly the…

Q: How does the contribution margin affect the cost-volume-profit analysis?

A: Cost Volume Profit analysis means the breakeven analysis which generally used to determine the break…

Q: Describe the Replacement Analysis using the Opportunity-Cost Approach?

A: The company always considers the replacement projects when the old machinery or plant in the project…

Q: Beside the dollar cost, what other costs should you consider when comparing alternative solutions to…

A: There could be lot of factors which are to be considered while comparing alternative solutions to a…

Q: How is cost-volume-profit analysis useful?

A:

Q: Discuss the FOUR basic steps in benefit-cost analysis, which aspect of benefit-cost analysis would…

A: Cost-benefit analysis or CBA is referred to as the prices, which helps in measuring the benefits of…

Q: How should mixed costs be classified in cost, volume, and profit analysis?

A: Based on the cost behaviour costs are classified as fixed costs , variable costs and mixed costs.…

Q: Write the equation for the Contribution margin?

A: Cost volume profit analysis: CVP analysis established the relation between cost, volume, and profit…

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: “In CVP analysis, gross margin is a less-useful concept than contribution margin.” Do you agree?…

A: Contribution Margin:Contribution margin is the excess of selling price over the variable costs of a…

Q: Express the two ways of contribution margin?

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

Q: What is a mixed cost? Give an example.

A: Cost: The amount paid to purchase the asset, install it, and put it into operations, is referred to…

Q: What type of cost is expertise? Is it a fixed cost or a variable cost? Defend your answer.

A: SOLUTION- FIXED COST  ARE THOSE COST WHICH DO NOT CHANGE WITH A REASONABLE LEVEL OF CHANGE .…

Q: Are variable costs always relevant costs? Explain.

A:

Q: Which of the following is the best definition of a variable cost?

A: Types of Costs 1. Variable Cost: The cost which changes with the change in the level of activity is…

Q: What is the variable cost? Give an example.

A: Variable costs tend to vary in direct proportion to the volume of production. If a cost is variable,…

Q: Which one of the following may not be considered a cost driver?

A: Under activity based costing, activities and cost allocation basis (cost drivers) are used to…

Q: what is the definition of fixed, variable, and mixed costs? Are variable costs or fixed costs easier…

A: Introduction: Cost accounting is a type of managerial accounting that capture a firm's production…

Management by Exception

A manager’s job is a very tough one. A manager needs to look at the various areas of work and as a manager he has to look after two or more important jobs or activities at the same time for the growth of the business. In order to do all these things in an effective manner, a manager must adopt or practice different management styles and tactics.