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3 years ago

A variable cost

Business

1 answer:

olchik [2.2K]3 years ago

4 0

Answer:

b. changes in the same direction and in direct proportion to changes in operating activity.

Explanation:

Variable costs rise whenever production increases and falls whenever it decreases. This relationship shows that variable cost is a direct function of production volume. Examples are labor, packaging, raw materials, as these are utilized in a company's manufacturing process.

They are different from fixed costs as the latter remain the same irrespective of the volume of production your business generates. Fixed costs are also predetermined ,hence remain the same throughout a specific period.

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EcoFabrics has budgeted overhead costs of $1,162,350. It has allocated overhead on a plantwide basis to its two products (wool a

alina1380 [7]

Answer:

EcoFabrics

1. Overhead Rates using activity-based costing:

Cutting = $1.80 per machine hour

Design = $390 per setup

2. Allocation of overhead:

Wool Cotton

Cutting $221,400 $221,400

Design 479,700 239,850

Total allocated $701,100 $461,250

3. Overhead rate using the traditional approach:

Predetermined overhead rate = $2.10

4. Allocation of overhead:

Wool Cotton

Total allocated $581,175 $581,175

Explanation:

a) Data and Calculations:

Budgeted overhead costs = $1,162,350

Estimated direct labor hours = 553,500

Activity Cost Cost Drivers Overhead Costs Wool Cotton Total

Pools

Cutting Machine hours $442,800 123,000 123,000 246,000

Design Number of setups 719,550 1,230 615 1,845

1. Overhead Rates using activity-based costing:

Cutting = $1.80 ($442,800/246,000) per machine hour

Design = $390 ($719,550/1,845) per setup

2. Allocation of overhead:

Wool Cotton

Cutting $221,400 ($1.80 * 123,000) $221,400 ($1.80 * 123,000)

Design 479,700 ($390 * 1,230) 239,850 ($390 * 615)

Total allocated $701,100 $461,250

3. Overhead rate using the traditional approach:

Predetermined overhead rate = $2.10 ($1,162,350/553,500)

4. Allocation of overhead:

Wool Cotton

Total allocated $581,175 ($1,162,350 * 50%) $581,175 ($1,162,350 * 50%)

4 0

2 years ago

Which of the following is the most important competitive factor in determining a company's ability to secure contracts to supply

Bogdan [553]

The company's price offer is the most important competitive factor in determining a company's ability to secure contracts to supply private-label footwear to large multi-outlet retailers of athletic footwear in a particular geographic region.

The S/Q ratings of both branded and private-label footwear manufactured at each production plant can be raised through TQM/Six Sigma quality control systems and best practices training.

Five things affect the S/Q rating: The following factors should be taken into account: (1) current-year spending per footwear model for new features and styling; (2) the percentage of superior materials used; (3) current-year expenditures for Total Quality Management (TQM) and/or Six Sigma quality control programs; (4) cumulative expenditures for TQM/Six Sigma quality control efforts (to reflect learning and experience curve effects); and (5) current-year and cumulative expenditures to train employees in using the best practices to assemble athletic footwear.

Know more about S/Q ratings click:

brainly.com/question/29618461

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7 0

1 year ago

Suppose the government wants to help the coffee industry, where many producers earn relatively little. It is considering two pos

postnew [5]

Answer:

i think your answer is A

4 0

2 years ago

Knox Company has a new product with a projected selling price of $6.00 each. It estimates that it could sell 100,000 units annua

Pachacha [2.7K]

Answer:

350,000

And if done per unit, $3.50

Explanation:

Both sales and variable cost are dependent on the number of units sold.

The sales less the variable cost gives the contribution margin. The contribution margin less the fixed cost gives the net operating income.

The target cost of the product is the difference between the selling price and the anticipated profit.

Target cost per unit

= $6.00 - $2.50

= $3.50

Total Target cost = $3.50 * 100,000

= $350,000

6 0

3 years ago

Describe the benefit of using and not using credit. Compare the following scenario and tell why it would be better to use credit

kodGreya [7K]

Answer:

1) So christmas shopping should be optional and most of the things in christmas shopping has no benefits for you, it can’t feed you, it can’t pay your rent, its only for your own entertainment so you shouldn’t use credit. If you use credit on useless things that you may end up not using at all, you could fall in debt. If your gonna go christmas shopping, try to not use credit, if your gonna use credit you have to consider if your gonna be able to pay this back or not. Using cash would be the best way becuase you have a limited amount of cash and you would be more careful spending it. With credit, you would be less considerate due to you having a lot of money all at once and some people fail to consider that they would have to pay back the cash they spent on the credit card. So not shopping at all should put you in the safe.

2) A student loan is usually alot. You should use credit becuase sometimes you don’t have the cash right away. If you graduate college with a degree, you cold get a job in the area you got a degree from. If successful and your careful about your spending, you should be able to pay back your student loan. Going to college and using credit is definitely the better answer here since a lot of jobs that can make you a living and could be used to pay back the student loan require a college degree. If you don;t go to college, sure you don’t have to pay back anything but you would be stuck with a very low income job and sometimes you would be barley making a living. The chances of a better job decreases if you don’t go to college since most jobs are looking for a special degree or at least a college degree.

3) Renting would be the best choice using cash. If your gonna get a house, you have to consider your income. If your income is low, a house is not a old choice. If a house is more expensive, a mortgage would be better since the interest is a one way (most of the time) but a credit has monthly intresest so the interest totaled up on an expensive house would be a lot. On a cheaper house its vice versa. If you have a low income job just rent with cash, renting would be best. Your most likely gonna live in a house forever but if you have to move somewhere, you’d have to sell it and do a bunch of confusing stuff and maybe get in even more debt, if you rent, you can move easily if you have to move somewhere closre to your work.

4) Vacation should be put on a personal loan. If your gonna go on vacation, don’t use credit. A vacation isn’t mandatory, you can go whenever you want. Juse becuase your friends are going to Hawaii, you don’t have to. If you have enough money, sure go for it, but you have to consider what you will do there and how big of a toll this could have your personal savings account. Like for example, lets say a plane ticket cost about 600 dollars. A hotel for a week stay would be about 100 dollars per night and that would be 700 dollars. Lets set aside 200 for entertainment and food. You would be rounding up to 1500 dollars just for a week in Hawaii and that’s just estimated (and probably the least amount).

5) Now for a car it really depends on what your job is and how far your job is. The best option I think would be buying a car with cash (if you have), credit (if you think you can pay it back). So if your job is like 10 miles away, a car would be the best since the subway or busses would take a long time and sometimes could not be consistent. A car would be faster and more reliable. If your job starts at 8am and using public transportation, it takes about an hour to get there. You leave at 7 am and the bus or train arrives 30 minutes late, your late for work and if it happens mulitple times, you could get fired. WIth a car its almost a 100 percent garuntee you wouldn’t be late and it’s faster. You’d keep your job and be able to pay off your Car if credit or just gain your money back if you used cash. If your job is next door, a car is useless but a car offers transportation. If you use like public transportation to go somewhere fun, it is cheap, bit with a car, you’d have to worry about gas prices and you’d have to pay a lot of attention. So it really depends on location.

5 0

3 years ago