(breakeven point) 0 = sales - variable xp - fixed xp

(unit sales price * number of units) - (unit variable cost * number of units) - fixed costs = net income

unit contribution margin = unit sales- unit variable cost

total contribution margin = total number of units sold * unit contribution margin

variable-cost percentage = total variable costs / total sales

contribution-margin percentage = total contr.margin / total sales

= unit contr.margin / sales price per unit

= 100% variable - cost percentage

(Selling Price per Unit – Variable cost per Unit) * Total Units Sold = Total Contribution Margin
Total Contribution Margin – Total Fixed Costs = Net income
Variable Cost per Unit = selling price per unit – (total contribution margin / total units sold)
Total contribution margin = (selling price per unit – variable cost per unit) * total units sold
Total Costs = (Fixed costs) + (Variable Costs) * (Quantity)
Contrb.Margin per bundle = [(selling price – Variable cost per unit) * QTY per bundle] + [(selling price –
Variable cost per unit) * QTY per bundle]
Breakeven points = Fixed costs / Contribution margin
Target sales in unites = ( fixed XP + Target profit) / unit contr. Margin
contribution margin is the excess of sales over variable costs. Gross margin, also called gross profit, is
the excess of sales over the cost of goods sold. Cost of goods sold is the cost of the merchandise that a
company acquires or produces and then sells.

--------------------------------
Ex. Lawn mower, scooter parts and hand tool parts.

1. Total indirect production cost/Total machine hours = Indirect production cost per machine hour

2. Total distribution to warehouse cost / Total kilograms = Distribution cost per kilogram

3. Sales = units sold * sales price per unit

4. Indirect production cost = IPC per machine hour * machine hours

Ex. Inventory of balance sheet, and financial statement

1. Cost = ending inventory units * cost per unit.
2. Total cost of production/units produced =cost per unit.
3. Work-in-process = 0
4. finished goods = finished devices * cost per unit

5. purchases= (units sold + units ending) * (price per unit)

EX Standard windows. The statement of operating income.

1.

Cost type Assignment method

Direct material DirecT Direct trace
Indirect production cost Indirect Allocate machine hours
Commissions Direct Direct trace
Distrb to warehouse Indirect Allocate weight

2. Custom detail = units sold * sales price per unit = total sales
Large STD = units sold * sales price per unit = total sales
Small STD = units sold * sales price per unit = total sales

3. Indirect production costs * Percent of machine hours used = allocated cost.

- Sales = units sold * sales price per unit.

- direct material = in the map
- indirect production cost =

CH5

Indirect manufacturing Mfg. cost of goods

Direct materials + Direct labor + costs = sold

We can compute three of the amounts by following the basic absorption income statement.

Sales $X
Less: Manufacturing cost of goods
(1) sold

Direct materials $X  

Direct labor X  

Indirect manufacturing costs X X

(2) Gross margin or gross profit   X

Selling and administrative expenses   X

(3) Operating income   $X

 Sales - Mfg. cost of goods sold = Gross profit
Gross profit - Selling and admin. expenses = Operating income
Direct labor + Indirect manufacturing costs = Conversion cost

We can compute the three amounts by following the basic contribution margin income statement.
Sales     ¥ X
Less variable expenses:        
Direct materials ¥ X    
Direct labor   X    
Variable factory overhead   X    
Variable manufacturing cost of goods
(a) sold ¥ X    
Variable selling and administrative
expenses   X   X
(b) Contribution margin     ¥ X
Less fixed expenses:        
Fixed factory overhead ¥ X    
Fixed selling and administrative
expenses   X   X
(c) Operating income     ¥ X

Variable mfg. cost

Direct materials + Direct labor + Variable factory overhead = of goods sold
Variable mfg. cost Variable selling and Contribution
Sales - of goods sold - admin. exp. = margin

Contribution margin - Total fixed expenses = Operating income

Variable indirect Variable mfg. cost
Direct materials + Direct labor + manufacturing = of goods sold
Variable selling
Variable manufacturing and administrative
Sales - Contribution margin - COGS = exp
Fixed selling and admin. Fixed indirect
Contribution margin - Operating income - exp. = manufacturing

bid price=150% of the estimated materials and supplies cost and + $75 per estimated labor hour.

Materials and supplies, at cost

$45,000
Hourly pay for consultants
60,000
Fringe benefits for consultants
32,000
Total variable cost
$137,000
Extra fixed costs incurred
7,000
Minimum bid
$144,000

EX: 1. Estimated total cost x Desired of consulting job (40%) = markup

2. Sales price per unit – (sales price per unit* % of sales) = target cost per unit
68-(20.4)

Target profit
 
Target cost

-(
Sales price per unit
x
% of sales
)=
per unit