Chap 07 Budgeting
Company manufactures decorative bamboo stools that sell for $25 each. Each frame
requires 4 linear feet of bamboo, which costs $2.00 per foot. Each frame takes
approximately 30 minutes to build, and the labor rate avera
Chap 05: Cost Volume Profit
1. Total contribution margin can be defined as:
2. If fixed expenses are $54,000, break-even sales units are 15,000, and the contribution margin ratio is
.60, what is the unit $ contribution margin?
3. If fixe
Relevant cost- cost that is differ between the alternative
Avoidable cost- cost that be eliminated by choosing one alternative over another
Sunk cost- a cost that already been incurred and the manager cannot avoid the cost not matter what
Job order costing: an overview
Job order costing system are used when:
o Many different products are produced each period
o Products are manufactured to order
o The unique nature of each order requires tracing or allocating cots to each job and
All of the following would likely be classified as cost centers except: (Points: 2)
Maintenance department at local grocery store.
your university's computer center
X-ray department of hospital
All of the above are cost centers.
2. A cost
center is a b
Plantwide and Departmental Overhead Rates
Direct materials and direct labor can be directly traced to products.
Overhead costs, on the other hand, cannot be easily traced to products
The simplest method is to use a plantwide overhead rate to assign ov
Direct material + direct overhead + manufacturing labor = product
Direct material- raw material that are intrigual to the product and can be used to trace back from the
product EX: radio installed in a car
Direct labor/touch labor the labor cost that can