Snipe Company has been purchasing a component, Part Q. for $19.20 a unit. Snipe is currently operating at 70% of capacity and no significant increase in production is anticipated in the near future. The cost of manufacturing a unit of Part Q, determined by the absorption costing method, is estimated as follows: Direct materials Direct labor Variable factory overhead Fixed factory overhead Total $11.50 4.50 1.12 3.15 $20.27

Q: How do you calculate contribution margin?

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

Q: Is

A:

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: A total cost equation can be used to predict future costs for various activity levels. Write the…

A: Concept The total cost is the sum of variable cost and fixed cost incurred For example if variable…

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: costs that change proportionately according to the changes in the cost driver.......

A: variable costs are the costs that change according to the changes in the cost drivers or changes…

Q: what are the differences between the FIFO, LIFO, and the average cost?

A: Inventory: It refers to the items held by an organization which were in various forms like raw…

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: Why cant prime cost be added to conversion cost to get total product cost?

A: Product Costs: Product costs are the costs that are incurred to produce a product or providing a…

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: On January 1, 2016, Cullumber Company issued 10-year, $104,000 face value, 6% bonds at par (interest…

A: Journal entry: Journal is a book of prime entry or a book of original entry in which transactions…

Q: re the difference between traditional product costs and activity-based product

A: Traditional product costs: The traditional method of allocating product costs is to allocate the…

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: Why is it essential to determine unit costs or profits?

A: Determining unit cost means to find out total cost incurred on a particular unit It is determined by…

Q: How is conversion costs per equivalent unit calculated?

A: The cost per unit is calculated as total cost divided by number of units.

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.