1) What is the assumption of cost structure? 2) Calculate contribution Margin

Q: How do you calculate contribution margin?

A: The contribution margin can be calculated by deducting the variable cost from the sales revenue.

Q: Define initial direct costs.

A: Initial direct cost: A cost that is incurred during the process of initiating the agreement of lease…

Q: Understand thedifferences between directand indirect costs

A: Cost:   It refers to the economic value incurred by an organization for manufacturing a product or…

Q: Discuss what the contribution margin is and how it is used.

A: Contribution margin is an excess amount of selling price of a product over the variable costs. In…

Q: Describe analyzing of profit using contribution margin.

A: The contribution margin ratio is the percentage of difference in a company's sales and variable…

Q: List the most important assumptions of cost-volume-profit analysis.

A: Cost Volume Profit Analysis (CVP Analysis): This analysis is helpful in determining that how any…

Q: Explain the difference between direct costs and indirect cost

A: Direct cost is the cost incurred by the organization while performing their center business process…

Q: What is the Contribution Margin?

A:

Q: Explain the measures of cost allocation.

A: The company incurs a different cost to provide goods and services to the customers. The entity…

Q: Giving examples, distinguish between  Direct costs and indirect costs

A: Direct Costs are the costs that can be directly traced with the goods produced. It generally…

Q: What is Cost account payable

A: All variable costs are reduced from sales revenue to get at a contribution margin, from which all…

Q: Describe the account analysis method for estimating a cost function.

A: Definition:   Account Analysis Method: The account analysis method of estimating a cost function…

Q: Define ( a ) contribution margin, ( b ) contribution marginratio, and ( c ) average contribution…

A: Contribution margin helps management to determine the amount of sales revenue left after considering…

Q: COSTING METHOD. 1. What is average cost method? 2. What is FIFO cost method?

A: Solution: 1.   Average cost method: Average cost method is also known as weighted average method.…

Q: What is interpretation of the usefulness of the contribution margin concept?

A: Contribution margin The additional profit gained for each unit sold is calculated by subtracting the…

Q: Giving examples, distinguish between Prime costs and Marginal costs

A: Prime costs are the firm total expenses directly related to the materials and labour used in…

Q: Why is it important to keep track of both direct and indirect costs? How do these costs effect…

A: (a )If we keep a tracking record of direct and indirect costs we can determine the firm's…

Q: Please explain the calculation of Unit contribution

A: Unit Contribution margin is contribution margin earned per unit It is calculated in 2 ways  Unit…

Q: Define the term total costs.

A: Costs: Costs refer to the expenses incurred by the business in the procurement of the materials,…

Q: Define and describe contribution margin per unit.

A: Contribution margin:   Contribution margin refers to the process or theory that is used to judge the…

Q: How is contribution margin calculated?

A: Contribution margin means sales revenue over and above the variable costs of production and selling…

Q: How does the contribution margin affect the cost-volume-profit analysis?

A: Cost Volume Profit analysis means the breakeven analysis which generally used to determine the break…

Manufacturing Costs

Manufacturing cost is the total cost of procuring or producing a product. In other words, the manufacturing cost is the cost that an individual or business owner undertakes for the manufacturing of goods.