4.20 Accounting 211 - Jones Change in NI Change in CM...

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Accounting 211 Tuesday, April 20th, 1999 Announcements: Office hours during finals week: Tuesday 9-11, Wednesday 1-3, and by appointment Read appendixes B & C before your reading of chapter 24 Lecture notes: Manufacturing Costs: Direct materials Direct labor Variable overhead Fixed overhead Absorption costing --fixed overhead treated as manufacturing cost VS. Variable costing --fixed overhead not a production cost Page 1033, Problem B5 Jones: CM > avoidable fixed costs (keep running) Lee: CM < avoidable fixed costs (shut down)
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Unformatted text preview: Jones: Change in NI Change in CM- 73,250 Change in FC 51,200- 22,050 Unavoidable FC = 46,050 Lee: Change in NI Change in CM- 54,740 Change in FC 55,100 360 Unavoidable FC = 26,140 Page 1022, SE 10 Change in revenue $4 Change in costs $3 Change in profits $1 Product B should be processed further. Example: Make or Buy Decision Unit manufacturing costs: Materials 12.50 Labor 7.25 Variable manufacturing overhead 3.40 Fixed manufacturing overhead 4.75 Total 27.90...
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