Absorbtion Costing VS Variable Costing

If the company decided to sell the new product at price of D.Cr. 8.20, that means the full fixed expense of 1.20 is covered and the company will make high profit. However, the selling price of D.Cr. 8.20 is very high and under this price the company will sell the new product at a lower volume than what the company planned sale volume in the budget and that will affect the company in the market as a strong competitor in the food manufacturing. According to the case, the company sales volume drop to 30 tons when the product was sold at the price of D.Cr. 8.2. Thus, my recommendation are as follows:

The items with a 12 month entries incur the cost irrespective of any production activities, while the items with 10 month

1. For financial accounting purposes, what is the total amount of product costs incurred to make 10,000 units?

In our second assumption, instead of using the cost of goods per cases in 1986, we try to use the percentage it counts in the total expenses which is 50.4% and to find the sales needed to break-even. The detail of the calculation is shown in the answer for questions d. The result is that 95,635, a little bit higher than the estimated sales of 90,000.

(cost of goods manufactured in 2008/ sales value for units produced in 2008) * ending inventory 2008

Booker Jones “other operating costs” increased from 1960 to 1961 primarily because of the cost of the barrels used, the occupancy costs and the warehousing costs. This is understandable because Booker Jones decided to increase production which would require 20,000 more barrels. If the cost of barrels is $31.50, then these 20,000 barrels would have cost $630,000. This is precisely why the cost of barrels used went up from 1960 to 1961. If these barrels were not considered an “Other Operating Cost” but instead

So, in order to determining the number of items actually sold here is how you calculate it:

1) If a monopolist's price is $65 a unit and its marginal cost is $25 for the last unit produced,

The overhead spending variance and the overhead efficiency variance are useful only if variable overhead

The unit selling price is $26. Assume that costs have been stable in recent years.

2. Assume that there is no January 1, 20X7, inventory; no variances are allocated to inventory; and the firm uses a “full absorption” approach to product costing. Compute:

a. You should assume that operating costs will grow annually at 1% in real terms.

The other assumptions of the management are that the selling price for goods will be the same in 2007 and that top line growth will be 3% assuming no acquisition in 2007. If in 2007, the

Solo Company is a small merchandising firm. During the next month, the company expects to sell 500 units. The company has the following revenue and cost structure:

sales volume ⎞ ⎛ unit variable sales volume ⎞ ⎛ unit fixed ⎜ ⎟ −⎜ ⎟ − ⎜ sales price × ⎟ ⎜ expense × ⎟ expenses = 0 in units ⎠ ⎝ in units ⎠ ⎝