A100_Mgl_2_solutions

A100_Mgl_2_solutions - Fixed versus variable costs Several...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Fixed versus variable costs Several scenarios are described below. For each one, determine whether the costs are fixed or variable with respect to product cost. a. Production employees are paid on a "piece rate" system, whereby each is paid a fixed dollar amount for each unit of product (s)he assembles. b. Production employees are paid an hourly rate, and guaranteed a 40 hour work week by contract with the employer (whether there is work to do or not). c. Production employees are paid an hourly rate, and the employer sends them home without pay when there are no products to assemble. d. Direct materials are purchased and entered into production. e. Salespeople are paid 10% of the cost of each unit that they sell. V or F - (circle one) V or F - (circle one) V or F - (circle one) V or F - (circle one) V or F - (circle one)
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Breakeven analysis Answer this question by filling in the blanks in the paragraphs below. Be sure that your answers are as clear and correct as possible. The formula for a straight line in two-dimensional space is frequently shown as y = mx + b. In "breakeven" graphs, two straight lines are usually depicted -- one where y = total costs and another where y = total revenues. When "y" is total cost, "m" is the variable cost per unit , and "b" is fixed cost . When "y" is total revenue, "m" is unit selling price . Now, assume that two competing companies (A & B) sell the same product at the same price.
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 5

A100_Mgl_2_solutions - Fixed versus variable costs Several...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online