Yeast = Direct Variable Cost
Flour = Direct Variable Cost
Packaging materials = Direct Variable Cost
Depreciation on Ovens = Indirect Fixed Cost
Rent on Factory Building = Indirect Fixed Cost
Fire Insurance on Factory Building = In
Budgeted Income Statement
For the Year Ended December 31, 2012 (in thousands)
Equipment ($6,000 X 110% X 106%)
Maintenance Contracts ($1,800 X 106%)
Cost of Goods Sold ($4,600 X 103% x 106%)
Ridgecrest's strategy would be considered cost leadership. According to the reading Ridgecrest wants to
grow by selling low cost boxes. Cost leadership is where a company plans to grow by improving
manufacturing and efficiency to
1. A. Contribution Margin = Revenue Variable Costs
Contribution Margin = (410,000 units X $68)-( 410,000 units X $60)
Contribution Margin = $3,280,000
B. Operating Income = Contribution Margin Fixed Costs
Operating Income = $3,280,000 - $1,6
Raising subscription fees is a PLANNING decision.
Informing customers of the new fees is a CONTROL decision.
Offering new services is a PLANNING decision.
Terminating the vice president is a CONTROL decision.
Reducing fees to gain custom