ABC has the following information for its quality cost Total defective units Number of units reworked Number of customer units returned Profit for a good unit Profit for a defective unit Cost to rework a defective unit Cost of a returned unit Total prevention cost Total appraisal cost 1,000 750 150 P40 P25 P10 P15 P11,000 P4,000

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 a fixed against a variable cost and give an example of each?

A: A fixed cost is a cost that does not change with the level of output or activity in a business. It…

Q: what is an indirect cost and how is it different than a direct cost?

A: Indirect Cost: Indirect costs are the costs of doing business that are not easily identified with a…

Q: 6. What are costs that vary in proportions to changes in the activity base?

A: In cost accounting, different types of costs are incurred and accounted for. Some costs do not…

Q: What are the formulas for: 1. Contribution Cost 2. Break even cost

A: Cost refers to the expense that is incurred for making the goods or providing services by the…

Q: Define variable cost and fixed cost. Give an example of each?

A: Variable Cost: Variable cost refers the cost which varies due to the change in the level of…

Q: How can we determine the operating margin?

A: Operating margin refers to percentage of net operating income over the sales of the company.

Q: Machine Replacement Decision A company is considering replacing an old piece of machinery, which…

A: Required (a)Differential AnalysisContinue with Old Machine (Alt. 1) or Replace Old Machine (Alt.…

Q: costs in which there are variable components and fixed components.....

A: Fixed costs will not change with the change in the level of production. Variable costs will change…

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: Which costs make up “prime” costs？

A: Prime cost is that cost, which is directly concerned with the product such as direct material,…

Q: How to calculate total prime cost

A: Meaning of Prime Cost: Prime costs are a firm's expenses directly related to the materials and labor…

Q: What is the relationship among fixed costs, contribution margin, and thebreak-even point?

A: Fixed costs: These are the costs incurred by the organization irrespective of the volume of…

Q: Describe the difference between prime costs and conversion costs?

A: Solution:-  Difference between prime costs and conversion costs as follows under:-

Q: Define sunk cost

A: Companies when making crucial decisions about their operations consider relevant costs i.e. costs…

Q: example of lower of cost or net realizable value and explain

A: The concept of lower of cost or net realizable value says that the amount of inventory should be…