Variable Cost Essay

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

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

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

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

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

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

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

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

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

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

Health services managers are essentially interested in how costs are affected by changes in volume. Cost behavior refers to a cost 's reactions to activity level. A cost may rise, fall, or remain constant as activity levels fluctuate. We can classify several types of costs on the basis of their relationship to the amount of services provided, often referred to as activity, utilization, or volume (Gapenski, 2012). When dealing with the future there is a level of uncertainty of volume with regard

particular, cost measures, are needed to evaluate alternate strategies on whether to introduce a new product or service line, to determine the appropriate sale price and the consequent market position for the firm’s product. Question 1) “Contribution”

to add that cost behavior is also identifying the key resources that are performed, resources used in performing these activities, costs of the resources, and what the cost is driven from. 2-2. Two rules of thumb when analyzing cost behavior are to manage what the company manufactures, sells, and to give advice as to where costs can be reduced. 2-3. Three examples of a variable cost are a 12% increase in the production of dresses, which will cause a 12% increase in variable costs. A 10% increase

3369. Cost behavior refers to the manner in which: *a. a cost changes as the related activity changes b. a cost is allocated to products c. a cost is used in setting selling prices d. a cost is estimated 3370. The three most common cost behavior classifications are: a. variable costs, product costs, and sunk costs *b. fixed costs, variable costs, and mixed costs c. variable costs, period costs, and differential costs d. variable costs, sunk costs, and opportunity costs

Job J57 and Job K52 involve 15 acres of landscaped terrain which will require special-order sprinkler heads to meet the specifications of the project. Using a job cost system to produce these parts, the following events occurred during December 2012. Raw materials were requisitioned from the company’s inventory on December 2 for $5,061; on December 8 for $1,059; and on December 14 for $3,459. In each instance, twothirds

Each of these products can be produced in either of two plants. For administrative reasons, management has imposed a second restriction in this regard. Just one of the two plants should be chosen to be sole producer of the new products. The production cost per unit of each product would be essentially the same in the two plants. However, because of differences in their production facilities, the number of the hours of production time needed per unit of each product might differ between the two plants

of time needed to perform each sewing operation and therefore the total time required to complete a particular style garment. The estimates are derived from time-and-motion (i.e., industrial engineering) studies and take into account a number of variables, including the speed of each type of sewing machine required for a specific operation, the education/training of each operator, and existing technology used by the assembly workers at SEWMEX. Pants Shirts Jackets Other $ 7.00 $ 6.00 $25.00

performance report, actual costs should be compared to budgeted costs at the original budgeted activity level. True False 3. The overhead spending variance and the overhead efficiency variance are useful only if variable overhead really should be proportional to the activity measure that is being used in the flexible budget. True False 4. The variable overhead efficiency variance reflects how

Jump to Navigation Frame Your location: Assessments › View All Submissions › View Attempt View Attempt 1 of 2 Title: | Exam 2 (Chapters 10-18) | Started: | July 7, 2011 12:16 AM | Submitted: | July 7, 2011 2:11 AM | Time spent: | 01:54:47 | Total score: | 94/200 = 47% Total score adjusted by 0.0 Maximum possible score: 200 | 1. | Chapter 10 #265 |   | Use this information for questions that refer to the World Tennis Ball (WTB) Company case. World Tennis Ball Co. (WTB) makes

large company. Actual costs Static Incurred budget Activity level (in units) 800 750 Variable costs: Indirect materials $6,850 $6,600 Electricity $1,312 $1,275 Fixed costs: Administration $3,570