o decide whether to accept or reject special order, the manager should ensure that the order is within the capacity, current sales will remain, and it will result to additional production incremental profit reduced cost
Q: variable
A: Performance evaluation based on income could be best achieved by using variable costing method in…
Q: Choose the letter of the correct answer 1. Statement 1: Product cost under Variable costing are…
A: Hi student Since there are multiple questions, we will answer only first question.
Q: Management is considering a one-time-only special order. There is sufficient idle capacity to fill…
A: Introduction:- Management (or management) is the administration of a company, whether for-profit,…
Q: Which of the following is true if a company can accept a special order without affecting its regular…
A: The following is true if a company can accept a special order without affecting its regular sales…
Q: “ Managers must decide whether a product should be sold at splitoff or processed furthur.The sales…
A: No, any method that is used to assign costs to individual products that is applied to the problem of…
Q: Special order, opportunity cost. In order to determine whether a special order should be accepted at…
A: Opportunity Cost:Opportunity cost is total of potential income and other benefits that are lost due…
Q: Which of the following is true of a company that uses absorption costing? Multiple Choice Net…
A: Absorption costing: Under the absorption costing method, manufacturing costs such as direct material…
Q: TRUE OR FALSE When absorption costing is used, management may be tempted to overproduce in each…
A: Under the absorption costing method, fixed overhead is considered as a product cost which is…
Q: CVP analysis
A: Option "b" is wrong because the statement is true. The purpose of CVP analysis is to study the…
Q: 1: When using absorption costing, a company may be able to show a profit even if it is operating…
A: Solution: True, When using absorption costing, a company may be able to show a profit even if it is…
Q: When deciding whether we should add or drop a product or segment, we should think about Multiple…
A: When deciding whether we should add or drop a product or segment, we should think about : the…
Q: Consider the following statements about absorption costing and variable costing: Variable costing…
A: Absorption costing and variable costing are managerial accounting and financial reporting cost…
Q: Comparison between incremental revenues and incremental costs is the decision base for: a.…
A: Incremental revenue and incremental cost concept means where while taking any decision , we wants to…
Q: To decide whether to accept or reject special order, the manager should ensure that the order is…
A: Cost accounting is one of the branches of accounting. Under this branch, all types of costs and…
Q: Which of the following would most likely decrease the product cost per unit under variable costing?…
A: Under variable costing, product cost per unit will comprise of direct material cost , direct labour…
Q: Mastery Problem: Contribution Margin, Cost-Volume-Profit Analysis and Break-Even Point (Overview)…
A: SOLUTION VARIABLE COST IS THE COST WHICH CHANGES WITH THE CHANGES WITH OUTPUT. VARIABLE COST PER…
Q: Management has at its disposal the following information: Revenue function: R =890Q ‒5.5Q2 The…
A: It is given that :- Revenue function: R =890Q ‒5.5Q2 profit-maximizing price: P=494 OMR
Q: Break-even analysis is concerned with determining a point at which the company can minimize total…
A: Break-even point is the point reached by the company where the revenues and costs of the firm are in…
Q: Special order, opportunity cost. In order to determine whether a special order should be accepted at…
A: Opprtunity cost should be consider while accepting special order. As order is received at full…
Q: Under variable costing a. Net income will tend to vary inversely with production changes b. Net…
A: DM=Direct materials OHD=Overhead Step 1 Variable costing is a method that only allocates…
Q: 1. One way management considers their costs is as average costs. Under this approach, managers can…
A:
Q: Target costing A target cost is 'a product cost estimate derived by subtracting the desired profit…
A: Target costing: A costing system that emphasizes on the minimization of existing and future design…
Q: In a product mix decision, which is the most important factor to consider in order to try to…
A: Product mix decision includes the decision related to the adding or eliminating of the product…
Q: 2. CVP analysis allows management to determine the relative profitability of a product by * Keeping…
A: CVP Analysis is one of the cost volume profitability analysis which shows changes in profits level…
Q: Appendix 12A) Which of the following items are included in the cost base under the absorption…
A: Under absorption costing, the cost of goods include fixed and variable production cost.
Q: G) Sales Mix Analysis. The C.E.O. then indicates his concern as to which products should be sold to…
A: The question is related to Marginal Costing. The Contribution Margin is the difference between the…
Q: Which of the following statements about CVP analysis is false? O a. Unit selling price, unit…
A: CVP analysis appearance at the impact of sales volume variations on prices and operative profit. The…
Q: 4. CVP analysis allows management to determine the relative profitability of a product by * Keeping…
A:
Q: Q.a.Do you agree from the following statements- Explain in details with examples (i) Variable costs…
A: Hello. Since your question has multiple parts, we will solve first question for you. If you want…
Q: The objective of management, under absorption costing, is that each product recovers its full cost…
A: The management is interested in that product which is giving profit in return on investment.it means…
Q: Under variable costing: a. Net operating income will always be higher than under absorption costing.…
A: Under variable costing, the inventory cost is valuate on the basis of variable manufacturing cost…
Q: Which of the following statements about CVP analysis is false? O a. Operating income calculations in…
A: CVP analysis estimates the how much the changes in a company's cost, both fixed and variable, sales…
Q: Explain how cost-volume-profit analysis can be used to determine the number ofunits of product Y…
A: For determining the number of units Davao would have to sell to attain a 20% profit on sales: Sales…
Q: The measure that reflects an organization's variable and fixed cost relationship and indicates how a…
A: Break even point (BEP): Breakeven is the point where total expenses are equal to total revenue. at…
Q: Which of the followings is not correct about cost-based pricing? Select one: a. Total fixed costs…
A: Cost based pricing is the method to set selling price based on the cost. To get selling price,…
Q: Accepting a special order will improve overall net operating income if the revenue from the special…
A: Variable costs are the costs which change with change in output. Sunk costs are the costs which are…
Q: 1. In the table below, Have-A-Seat Inc. has outlined many of the costs associated with producing…
A: Fixed cost is the type of cost which is fixed irrespective of the activity level. Variable cost is…
Q: Which of the following statements about CVP analysis is false? O a. Operating income calculations in…
A: Cost-Volume-Profit (CVP) Analysis: It is a method followed to analyze the relationship between the…
Q: Contribution Margin, Cost-Volume-Profit Analysis and Break-Even Point (Overview) Fixed, Variable…
A: -Variable cost refers to an expenditure that varies in gross dollar value as the degree of…
Q: How is operating income affected if the number of units sold exceeds the number of units produced?…
A: Under variable costing, fixed manufacturing overhead is considered as a period cost and deducted a…
To decide whether to accept or reject special order, the manager should ensure that the order is within the capacity, current sales will remain, and it will result to
- additional production
- incremental profit
- reduced cost
- same profit
Step by step
Solved in 2 steps
- Relevant Cost for non-routine decision making: Sell or Process Further How much is the incremental profit/loss for product A, B, CMastery Problem: Contribution Margin, Cost-Volume-Profit Analysis and Break-Even Point (Overview) Fixed, Variable and Mixed Costs An appreciation of cost behavior is needed in order for management to understand and predict profitability as the costs of material, labor and other operating expenses and levels of production and sales change. It's important to review the cost behavior of fixed, variable and mixed costs before contribution margins, cost-volume-profit analysis, and break-even points. 1. In the table below, Have-A-Seat Inc. has outlined many of the costs associated with producing office chairs. With respect to the production and sale of office chairs, classify each cost as: a.fixed b.mixed c.variable. a. Pressure-molded plastic for chair frames b. Pension cost: $0.50 per employee hour on the job c. Insurance premiums for inventory: $2,100 per month plus $0.01 for each dollar of inventory over $2 million d. Property taxes: $120,000 per year for…A. Mastery Problem: Break-Even Point in Units and the Profit-Volume Graph CVP and the Contribution Margin Income Statement For planning and control purposes, managers have a powerful tool known as cost-volume-profit (CVP) analysis. CVP shows how revenues, expenses, and profits behave as volume changes. In CVP analysis, costs are classified according to behavior: variable or fixed. To arrive at operating income in CVP analysis, costs are classified by behavior on the income statement. This format is known as the contribution margin income statement. Complete the following table to illustrate the format. Select a or b to pick the correct decscription under the sales column Contribution Margin Income Statement Sales $ XXX (a. Less: Variable Cost or b. Less: Fixed costs) (XXX) (a. Contribution margin or b. Gross margin) $ XXX (a. Less: Variable Cost or b. Less: Fixed costs) (XXX) Operating income $ XXX B. CVP and the Break-Even Point Review the following concepts about…
- 1. Mastery Problem: Contribution Margin, Cost-Volume-Profit Analysis and Break-Even Point (Overview) Fixed, Variable and Mixed Costs An appreciation of cost behavior is needed in order for management to understand and predict profitability as the costs of material, labor and other operating expenses and levels of production and sales change. It's important to review the cost behavior of fixed, variable and mixed costs before contribution margins, cost-volume-profit analysis, and break-even points. 1. In the table below, Have-A-Seat Inc. has outlined many of the costs associated with producing office chairs. With respect to the production and sale of office chairs, classify each cost as fixed, mixed, or variable. a. Pressure-molded plastic for chair frames b. Pension cost: $0.50 per employee hour on the job c. Insurance premiums for inventory: $2,100 per month plus $0.01 for each dollar of inventory over $2 million d. Property taxes: $120,000 per…Comparison between incremental revenues and incremental costs is the decision base for: a. Outsourcing decision b. Discontinuation decision O c. Insourcing decision d. Special orders when there is idle production capacityContribution Margin, Cost-Volume-Profit Analysis and Break-Even Point (Overview) Fixed, Variable and Mixed Costs An appreciation of cost behavior is needed in order for management to understand and predict profitability as the costs of material, labor and other operating expenses and levels of production and sales change. It's important to review the cost behavior of fixed, variable and mixed costs before contribution margins, cost-volume-profit analysis, and break-even points. 1. In the table below, Have-A-Seat Inc. has outlined many of the costs associated with producing office chairs. With respect to the production and sale of office chairs, classify each cost as fixed, mixed, or variable. a. Pressure-molded plastic for chair frames b. Pension cost: $0.50 per employee hour on the job c. Insurance premiums for inventory: $2,100 per month plus $0.01 for each dollar of inventory over $2 million d. Property taxes: $120,000 per year for the factory building and…
- Target costing A target cost is 'a product cost estimate derived by subtracting the desired profit margin from a competitive market price. (CIMA, 2005). Required: The target costing is cost management techniques, and discuss the advantages of using this technique within firms.2. CVP analysis allows management to determine the relative profitability of a product by * Keeping fixed costs to an absolute minimum. Highlighting potential bottlenecks in the production process. Assigning costs to a product in a manner that maximizes the contribution margin. Determining the contribution margin O per unit and projected profits at various levels of production.Cost-volume-profit analysis is useful for Question 8 options: 1) helping managers to answer "what-if" questions. 2) implementing a differentiation strategy. 3) eliminating uncertainty about external factors, such as interest rates. 4) for long-range planning. 5) assigning costs to products.
- Accepting a special order will improve overall net operating income if the revenue from the special order exceeds: Multiple Choice the contribution margin on the order. the incremental costs associated with the order. the variable costs associated with the order. the sunk costs associated with the order.Required: 1. Prepare a contribution format income statement. 2. Prepare a traditional format income statement. 3. Calculate the selling price per unit. 4. Calculate the variable cost per unit. 5. Calculate the contribution margin per unit. 6. Which income statement format (traditional format or contribution format) would be more useful to managers in estimating how net operating income will change in responses to changes in unit sales?State the uses of Marginal Costing technique in decision making process. How CVP( cost volume profit) analysis aid in the profit planning issues. - I want the answer only for the 2nd part
