Problem#3 The Bach Company produces pffice chairs. The price of the chairs is $99.75 and the variable co chair is $49.75 the following fixed cost is incurred: Depreciation of plant and equipment per year $20,000 Property Tax per year Variable Overhead $12,000 $5,200 Perform breakeven analysis of this company: b) What is the total cost function? c) What is the profit function? d) What is the breakeven point in units in number of chairs?
Problem#3 The Bach Company produces pffice chairs. The price of the chairs is $99.75 and the variable co chair is $49.75 the following fixed cost is incurred: Depreciation of plant and equipment per year $20,000 Property Tax per year Variable Overhead $12,000 $5,200 Perform breakeven analysis of this company: b) What is the total cost function? c) What is the profit function? d) What is the breakeven point in units in number of chairs?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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