Anne Sugar makes large ceramic pots for use in outdoor landscaping. She currently has two models, one square and the other round. Because of the size of Anne's creations, only one pot can be fired in the kiln at a time. Information about each model follows: Square $80 $20 Round $118 $41 Sales price Variable cost Firing time 2.5 hours 3.5 hours Assume that Anne can sell as many pots as she can create but that she is limited as to the number of hours that the kiln can be run. Compute the contribution margin per unit and contribution margin per hour of firing time. Square Ceramic Pot Round Ceramic Pot Contribution Margin per Unit Contribution Margin per Hour

Q: Contribution margin means

A: In the production there are many types of cost some cost change with volume but some do not change…

Q: How I can calculate the gross margin?

A: Gross margin formula Sale-Cost of goods sold

Q: What is cost-allocation base? Give three examples?

A: Costing: Costing is a technique used in cost accounting to determine the cost of a product. With the…

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: What is the difference between a direct cost and an opportunity cost.  Can you show the difference…

A: Direct cost and opportunity cost are two types of costs used in cost accounting.

Q: Distinguish betweenproduct costs and periodcosts and give examplesof each.

A: Product cost: The product cost relates to the manufacturing costs such as direct material, direct…

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: 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: What are the two components that can affect the contribution margin? Why is it important to…

A: The two components that can affect contribution margin: 1) Number of units sold. 2) Price / cost per…

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: 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 can we calculate the Total Present Cost for the Base Case and Alternative?

A: The question is based on the concept of calculation of cost benefit analysis of base case and…

Q: What is the ROE and operating Margin?

A: ROE = Net Income/Shareholders equity In the given case, Shareholders equity is 60 % of the vehicle…

Q: How is contribution margin calculated? What about contribution margin ratio? Aren’t they the same…

A: Subtracting the selling price per unit from the variable cost per unit yields the contribution…

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: How do you find full absorption cost

A: Absorption costing refers to the method of managerial accounting in order to capture all the costs…

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.