Variable Costing Managers frequently use variable costing for internal purposes for taking decision making. The cost of goods manufactured includes direct materials, direct labor, and variable factory overhead . Fixed factory overhead treated as period (fixed) expense. Contribution Margin Contribution margin is the excess of manufacturing margin above selling and administrative expenses. Contribution margin is calculated by deducting variable cost from sales or deducting variable selling and administrative expenses from manufacturing margin. To Prepare: The contribution margin and contribution margin ratio for each product.

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Answer 1

Question

Chapter 6, Problem 12E

(a)

To determine

Variable Costing

Managers frequently use variable costing for internal purposes for taking decision making. The cost of goods manufactured includes direct materials, direct labor, and variable factory overhead. Fixed factory overhead treated as period (fixed) expense.

Contribution Margin

Contribution margin is the excess of manufacturing margin above selling and administrative expenses. Contribution margin is calculated by deducting variable cost from sales or deducting variable selling and administrative expenses from manufacturing margin.

To Prepare: The contribution margin and contribution margin ratio for each product.

(b)

To determine

To State: The advice regarding to the relative profitability of two products.

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1. Dividend per share in a company Rs. 2, earning per share is Rs. 5 and the market value of the share is Rs. 25. What will be its yield? A. O 20% B. 12.5% C. 8% D. 25%

Answer 2

Question

Chapter 6, Problem 12E

(a)

To determine

Variable Costing

Managers frequently use variable costing for internal purposes for taking decision making. The cost of goods manufactured includes direct materials, direct labor, and variable factory overhead. Fixed factory overhead treated as period (fixed) expense.

Contribution Margin

Contribution margin is the excess of manufacturing margin above selling and administrative expenses. Contribution margin is calculated by deducting variable cost from sales or deducting variable selling and administrative expenses from manufacturing margin.

To Prepare: The contribution margin and contribution margin ratio for each product.

(b)

To determine

To State: The advice regarding to the relative profitability of two products.

Expert Solution & Answer

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See solution

Answer 3

Question

Chapter 6, Problem 12E

(a)

To determine

Variable Costing

Managers frequently use variable costing for internal purposes for taking decision making. The cost of goods manufactured includes direct materials, direct labor, and variable factory overhead. Fixed factory overhead treated as period (fixed) expense.

Contribution Margin

Contribution margin is the excess of manufacturing margin above selling and administrative expenses. Contribution margin is calculated by deducting variable cost from sales or deducting variable selling and administrative expenses from manufacturing margin.

To Prepare: The contribution margin and contribution margin ratio for each product.

(b)

To determine

To State: The advice regarding to the relative profitability of two products.

Expert Solution & Answer

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Answer 4

Question

Chapter 6, Problem 12E

(a)

To determine

Variable Costing

Managers frequently use variable costing for internal purposes for taking decision making. The cost of goods manufactured includes direct materials, direct labor, and variable factory overhead. Fixed factory overhead treated as period (fixed) expense.

Contribution Margin

Contribution margin is the excess of manufacturing margin above selling and administrative expenses. Contribution margin is calculated by deducting variable cost from sales or deducting variable selling and administrative expenses from manufacturing margin.

To Prepare: The contribution margin and contribution margin ratio for each product.

(b)

To determine

To State: The advice regarding to the relative profitability of two products.

Expert Solution & Answer

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Answer 5

Chapter 6, Problem 12E

(a)

To determine

Variable Costing

Managers frequently use variable costing for internal purposes for taking decision making. The cost of goods manufactured includes direct materials, direct labor, and variable factory overhead. Fixed factory overhead treated as period (fixed) expense.

Contribution Margin

Contribution margin is the excess of manufacturing margin above selling and administrative expenses. Contribution margin is calculated by deducting variable cost from sales or deducting variable selling and administrative expenses from manufacturing margin.

To Prepare: The contribution margin and contribution margin ratio for each product.

(b)

To determine

To State: The advice regarding to the relative profitability of two products.

Answer 6

Chapter 6, Problem 12E

(a)

To determine

Variable Costing

Managers frequently use variable costing for internal purposes for taking decision making. The cost of goods manufactured includes direct materials, direct labor, and variable factory overhead. Fixed factory overhead treated as period (fixed) expense.

Contribution Margin

Contribution margin is the excess of manufacturing margin above selling and administrative expenses. Contribution margin is calculated by deducting variable cost from sales or deducting variable selling and administrative expenses from manufacturing margin.

To Prepare: The contribution margin and contribution margin ratio for each product.

Answer 7

Chapter 6, Problem 12E

(a)

To determine

Variable Costing

Managers frequently use variable costing for internal purposes for taking decision making. The cost of goods manufactured includes direct materials, direct labor, and variable factory overhead. Fixed factory overhead treated as period (fixed) expense.

Contribution Margin

Contribution margin is the excess of manufacturing margin above selling and administrative expenses. Contribution margin is calculated by deducting variable cost from sales or deducting variable selling and administrative expenses from manufacturing margin.

To Prepare: The contribution margin and contribution margin ratio for each product.

Answer 8

(b)

To determine

To State: The advice regarding to the relative profitability of two products.

Answer 9

(b)

To determine

To State: The advice regarding to the relative profitability of two products.

Answer 10

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Answer 11

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Answer 12

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Answer 13

Ch. 6 - What types of costs are customarily included in...Ch. 6 - Which type of manufacturing cost (direct...Ch. 6 - Which of the following costs would be included in...Ch. 6 - In the variable costing income statement, how are...Ch. 6 - Prob. 5DQ Ch. 6 - Discuss how financial data prepared on the basis...Ch. 6 - Prob. 7DQ Ch. 6 - Explain why rewarding sales personnel on the basis...Ch. 6 - Prob. 9DQ Ch. 6 - Prob. 10DQ

Solution Summary: The author explains that variable costing managers use it for internal purposes for taking decision making. Contribution margin is the excess of manufacturing margin above selling and administrative expenses.

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To State: The advice regarding to the relative profitability of two products.

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