Using Benefit – Cost Ratio analysis method, determine the best alternative in the following chart if MARR = 10%: You are muted. Press Alt+A to unmute your microphone, or press and hold the SPACE key to temporarily unmute. Alt. D 45,000 32,000 Alt. A Alt. B Description Present Worth of Cost ($) Alt. C 15,000 30,000 25,000 20,000 Present Worth of Benefits ($) 22,000 45,000

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 cost behaviour.

A: High-Low Method: The high-low method is the method by which the variable component and the fixed…

Q: Cost-Savings Sharing Pricing Defined?

A: It is a project pricing technique where the savings in the cost of the project are mutually shared…

Q: Discuss the merits and demerits of the cost volume profit analysis (CVP)

A: Cost volume profit analysis is one of the important concept used in cost accounting. Under this…

Q: Explain the implementation issues of the cost estimation methods

A: Cost estimation is the process of determining the probable cost of a product before starting the…

Q: Define initial direct costs.

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

Q: Define cost-volume-profit analysis?

A: Cost-Volume-Profit Analysis (CVP Analysis): CVP Analysis is a tool of cost accounting that measures…

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: What is the Contribution Margin?

A:

Q: Explain price improvement

A: It is a process where the purchasing customer gets the opportunity to buy shares at a lower cost…

Q: Explanation of the meaning of the target costing ?

A: Cost accounting system is a framework that guides the firm to calculate their cost and helps in…

Q: Define relevant cost.

A: Relevant cost is a cost which can be changed with change in selection of a alternative decision.…

Q: Explain the usefulness of contribution margin and responsibility margin in making short-term…

A: Decision-making process: Decision making can be defined as the process of making choices through…

Q: Search about how different techniques are efficient to estimate cost. – Engineered estimate of cost…

A: Four regular methodologies are utilized to appraise fixed and variable expenses:   Record…

Q: Describe the approaches of target profit.

A: Target Profit: It refers to the desired amount of profit that a company expects to achieve by the…

Q: Explain the relationship between the costs of flexible and committed resources, usage of resources,…

A: Cost accounting system: Cost accounting system of an organization consists of procedures and…

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: Question 1: Differentiate between standard cost and estimated cost.

A: Since you have asked multiple question, we will solve the first question for you. If you  want any…

Q: Discuss relevant cost.

A: Relevant cost term is used in making decision whether to buy or not.Whether to produce a goods or…

Q: Examples of how cost–volume–profit analysis can be used for decision-making.

A: Solution:Cost volume profit analysis represents the impact of change in cost to operating profit. it…

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: Define Cost recovery method

A: Cost recovery is a method in accounting wherein a business only records the revenue it earns from a…

Q: Define the term accelerated cost recovery system (AC RS)?

A: The AC RS is a method of depreciation. It is used for depreciating the property for tax purposes

Q: Which of the following costs is relevant for decision-making? A. Sunk cost B. Fixed cost C.…

A:

Q: Define Full-cost method.

A:

Overheads

In cost accounting, overhead refers to those expenses which occur during the operating of a business. Overhead includes the fixed, variable, or semi-variable which is not directly involved with a company product or service. It is very important to analyze overhead expense as it helps the company in determining how much a company must charge for its products and services so that they can generate profit.  Overhead expenses depend upon the nature of the business operations.