{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

7-GrC421_ControlAnalysis

7-GrC421_ControlAnalysis - California Polytechnic State...

Info icon This preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
1 ment for Print and Digital Media ersity Organizational Control Analysis GrC 421 Production Managem California Polytechnic State Unive ment for Print and Digital Media ersity Cost Volume Analysis Cost Volume Analysis : Focuses on relations between cost, revenue, and volume of output Identify all costs related to production of a product 1. FIXED COSTS (FC) – do not vary with changes in volume for the period of analysis A. Examples of fixed costs: Rent/lease payments (equipment or space) GrC 421 Production Managem California Polytechnic State Unive - - Interest or mortgage payments (equipment or space) - Property taxes (fixed yearly payment) - Insurance (fire, theft, damage, liability) - Depreciation – an accounting charge designed to compensate (or repay) an organization for purchase of a long-term asset - Administration Salaries - General office staff - Utilities (budgeted: garbage, H20, electric, gas) ment for Print and Digital Media ersity Cost Volume Analysis Identify all costs related to production of a product 1. FIXED COSTS (FC) Example Rent $2,500.00/mo Equipment $13,200.00/mo Insurance $300.00/mo Depreciation $1,000.00/mo GrC 421 Production Managem California Polytechnic State Unive Salaries $10,000.00/mo Office Expenses $4,000.00.mo Utilities $1,000.00.mo Total $32,000.00/mo or $384,000.00 annually ment for Print and Digital Media ersity Cost Volume Analysis 2. VARIABLE COSTS (VC) –vary in proportion to changes associated with volume for the period of analysis A. Examples of variable costs: - Raw materials and supplies (ink, paper, plates, chemicals, rollers, toner, etc.) - Labor (hourly wage) - Sales commissions (% of sale) GrC 421 Production Managem California Polytechnic State Unive - Utilities (for running equipment) - Taxes (payroll, sales, income) 3. REVENUE (TR) = Total Revenue: amount of sales generated from the production and sales of a product - TR = No. of units sold x Price/unit - Ex: 1000 copies @.05 = $50.00 revenue ment for Print and Digital Media ersity Terms Total Costs (TC) Quantity (Q) = vol or output Fixed Costs (FC) Variable Cost/unit (V) Variable Costs (VC) Revenue/unit (R) Profit (P) Total Revenue (TR) VC = V x Q TC = FC + VC
Image of page 1

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

View Full Document Right Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern