Variable Cost Essay

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  • Variable Cost

    2976 Words  | 12 Pages

    pounds with $14,600 in materials cost and $7,200 in conversion cost. The May 1 work in process inventory was 100% complete with respect to materials and 30% complete with respect to conversion. During May, 167,000 pounds were started into production. The May 31 inventory consisted of 15,000 pounds that were 100% complete with respect to materials and 60% complete with respect to conversion. The company uses the weighted-average method to account for units and costs. Required a. Determine the equivalent

  • Harrington: Cost and Variable Costs

    1062 Words  | 5 Pages

    In addition, by outsourcing the production in Mexico, it can not only decrease costs, but also provide the possibility to respond more swiftly to changes in demand. With this in mind, it is strongly suggested that Harrington launches a new active-wear line. Appendix A Start Up Costs: | | | Start-up Costs (Pants Plant) | $ 1,200,000 | | Start-up Costs (Hoodie and Tee-shirt Plant) | $ 2,500,000 | | Equipment (Pants Plant) | $ 2,000,000 | | Equipment (Hoodie

  • Midterm: Variable Cost

    1273 Words  | 6 Pages

    Prime cost. | B | Conversion cost. | C | Period cost. | D | Nonmanufacturing cost. | 2. | Prime cost and conversion cost share what common element of total cost? | A | Direct materials. | B | Direct labor. | C | Variable overhead. | D | Variable overhead. | 3. | On the Schedule of Cost of Goods Manufactured, the final Cost of Goods Manufactured figure represents: | A | the amount of cost charged to Work in Process during the period. | B | the amount of cost transferred

  • Variable Cost

    1729 Words  | 7 Pages

    Cost management | Wilkerson Company Case | | 1. What is the competitive situation faced by Wilkerson? The competitive situation faced by Wilkerson is quite severe. Price cutting in its main product has led to a huge drop in profit. While price increase in another product line partially made up the loss. We will discuss the detailed situation line by line. (1) Valves It was the first product line developed by Wilkerson and its high quality brought it a loyal customer base. Even

  • The Cost Of Variable Cost

    2557 Words  | 11 Pages

    total variable cost changed depending on the production whereas the total cost stays the same no matter how much a business sells whether it’d be thousands or none. Unlike a fixed cost, a variable cost can be much more difficult to budget, and may at times exceed the limits of the budget when the variable cost is related to an unexpected expense, and sometimes it can come to the stage where the limits of the budget can exceed due to the unexpected expenses rise. The advantages of Variable costing

  • Difference Between Product Revenue And Variable Cost

    1142 Words  | 5 Pages

    Contribution margin is one of the vital tools utilized throughout the Capsim simulation and business operations in general. Bushong and Talbolt (2001) summarizes the contribution margin ratio as the difference between product revenue and variable cost, over variable cost. Recommendations under the Capsim simulation advised that groups maintained a contribution margin no less than 30% as this will aid in long-term business profitability and sustainability (Capsim, 2014). Through the successful understanding

  • Variable Costs

    1487 Words  | 6 Pages

    basketballs each day, which it sells to customers for $30 each. All costs associated with production and sales total $10,000; however, if the manufacturer were to produce one additional basketball per day, total costs would increase to $10,100. From these amounts, we can tell that a. the firm has negative profit. b. marginal cost equals $100. c. marginal cost equals $150. d. marginal cost equals marginal

  • Computer Equipment : Fixed Cost And Variable Cost

    804 Words  | 4 Pages

    Exhibit 2 has fixed cost and variable cost both in the report. Other cost we need to look it is the opportunity of the purchased computer equipment which has a value of around $25,500. The lease computer equipment is cannot be cancelled, so we consider it a sunk cost and do not take it into consideration. Next, we need to look at the purpose of creating PDS. The purpose was to help deregulate PTC and rescind the push through of a rate increase. If they shutdown PDS, PTC would have to pay market

  • Total Variable Costs

    1408 Words  | 6 Pages

    predict costs and manage them on a day-to-day basis, managers must identify: A. cost of resources used B. key activities and resources used to perform activities C. cost drivers D. all of the above 2. Cost drivers are ________. A. measures of activities that require the use of resources and thereby cause costs B. different types of functional areas in the firm C. different types of cost calculations D. the different functions in the value chain 3. Which of the following statements about costs is FALSE

  • Variable Cost and Points Question

    1250 Words  | 5 Pages

    Question 1 1.   Mrs. Granberry is going to sell Christmas tree lights for $20 a box. The lights cost Marsha $5 a unit and any unsold lights can be returned for a full refund. She is planning to rent a booth at the upcoming Happy Holidays Convention, which offers three options: 1. paying a fixed fee of $1,500, or 2. paying a $500 fee plus 10% of revenues made at the convention, or 3. paying 25% of revenues made at the convention.Which of the following statements is FALSE? Answer | | One

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