Variable Cost Essay

of the following is not a cost driver of customer services costs? 21) Which value chain function would include the cost of computer-aided design equipment and cost to develop the prototype of a product? 22) Walnut Corporation sells desks at $480 per desk. The costs associated with each desk are as follows: Total fixed costs for the period are $456,840. The contribution margin per desk is 23) Hug Me Company produces dolls. Each doll sells for $20.00. Variable costs per unit total $14.00, of

1) Company Background The Spring Airlines is one of the low-cost carriers (LCC) in China and was established in 2005. The Spring Airlines is a subsidiary of China Spring Group. Under the Group, there is a travel agency called Shanghai Spring International Travel Service Ltd. which provides a stable amount of passengers to the airline. The Spring Airlines is based in Shanghai and owns 46 A320 aircrafts. It serves around 58 inbound routes, and 10 regional and international routes. The regional routes

same Contribution Loss of Contribution 15,323,672 766,184 15,017,199 750,860 14,716,855 735,843 14,422,517 721,126 14,134,067 706,703 5% Loss due to light beer entry .05 * Contribution Launch advertising costs Incremental SG&A expenditures Incremental costs associated with Light Product E.C. Light Market Assumed Market for ligth beer (b/s) *1 Market share for Mountain Man Light Barrels sold Mountain Man Light Contribution of Light Product *2 Net change in contribution *3 Discount

) ) pa 11 Fi nanci aI Analysis I. Section 9 Financial Statement Formats The formats of the Summary Statement of Income and departmental statements can of coursebe designed to provide only ODeamount column to record figures für the time period covered by the statement. While the primary purpose of any of these statements is to present the revenue and expenses für the most recent accounting period, the true significance of such amounts can only be fully understood when compared with budgets

statement where this occurs. Fixed cost are costs that remain unchanged even as the volume of production grows whereas variable costs do exhibit variance directly proportional with the change in volume. Outlined on the company’s income statement, the operating expenses are duly noted as advertising, promotional and selling expenses, general and administrative expenses, and net of impairment of assets. Each of these specific expenses are either fixed or variable in nature. Beginning with advertising

need to be tested. The first scenario has the $170 selling price and fixed costs of $20 million. Using these inputs, the first step is to calculate the estimated profit under each scenario. Demand Price VC FC Profit Probability 150000 170 4500000 20000000 1000000 0.25 250000 180000 170 5400000 20000000 5200000 0.5 2600000 200000 170 6000000 20000000 8000000 0.25 2000000 4850000 Est. Profit The second scenario has fixed costs of $25 million, but a higher selling price of $200. These changes need to

Direct costs for the Ruger Clinic of Toledo, Ohio totaled $100,000 in 2007 and represents the total cost pool. The Ruger's uses direct cost allocation of expenses in the cost pool to three revenue-producing patient services. Drivers under consideration for the allocation of costs are patient service revenue (a direct dollar for dollar allocation) and hours of housekeeping services used (a volume-based activity for allocation). Drivers amounted to the following activity in dollars and volume, respectively:

TF Qu. 3 You can t make a mistake by locating... You can 't make a mistake by locating where labor costs are low. | True | | False | Labor costs are only occasionally a primary consideration in location decisions. TF Qu. 7 A strategy that emphasizes convenience for ... A strategy that emphasizes convenience for the customers would probably select a single very large facility. | True | | False | Convenience for customers would tend to necessitate small, dispersed facilities.

say that the 2004 promotion profitable. Firstly, both Brown and Janus, the consultant, calculated the variable cost by using two ways. The consultant added all expenses which have administrative cost, manufacturing overhead, advertising / promotion expense, selling expense and direct labor and raw material cost. On the other hand, Brown added only direct labor and raw material cost as a variable cost. Moreover, both of them found the sales without promotion differently. Janus worked with several companies

18-2 Full Versus Variable Costing and Ethical Issues HeadGear, Inc is a small manufacturer of headphones for use in commercial and personal applications. The HeadGear headphones are known for their outstanding sound quality and light weight, which makes them highly desirable especially in the commercial market for telemarketing firms and similar communication applications, despite the relatively high price. Although demand has grown steadily, profits have grown much more slowly, and John Hurley,