Variable Cost

  • Submitted by: torreydiller
  • Views: 436
  • Category: Other
  • Date Submitted: 09/25/2011 02:19 PM
  • Pages: 2

Variable Cost

10.1 assignment
What are the variable costs? The variable cost is $3.93 cost per unit (one meal) and 13,755 low month.
What is the fixed cost? 6,745
How many meals the program needs to provide for the fiscal year to reach BEP? 43,992
How much profit will the program earn providing 45,000 meals? $1,854.72
Fixed cost take the variable low month cost (13,735) and subtract it from the total cost for the low month (20,500) equaling 6,745 for the fixed cost.
Breakeven Point uses the formula Px=A+Bx.
Putting $5.77 service price in for P the fixed cost of 6,745 in for A, and the variable cost of the meal $3.93 in for B. In that, x is the amount of service to be provided, which we are solving for. Now, subtract both sides with 3.93x and the new equation will be 1.84x=6,745 now we will divide 6,745 by 1.84 and the answer will be x=3,666. This answer represents the meals to be served for a month, however multiply that number by 12 to find the fiscal year. In the fiscal year 43,992 meals will need to be served in order to meet the BEP.
10.2 assignment
The new BEP is 961 newsletters. The new BEP is not feasible because the coordinator and the part-time assistant believe they can handle up to 650 newsletters; however just too breakeven they would have to meet 961. I believe there would be slack capacity because the numbers do not match and the fixed cost and the current variable are too high to meet the BEP. If the company only does 650 newsletters and the BEP are 961 the slack capacity will be $1,399.50 until they can produce more newsletters. One person getting person getting paid 5,000 was able to provide 525 but now they are higher two more people at the cost of 9,900 fixed cost and they are only able to provide 125 more newsletters than the one person before.
  • Fixed Vs. Variable Cost
    two main types of costs, fixed costs and variable costs. Fixed costs stay the same regardless of the number of units sold. Variable costs increase or decrease due...
  • Fixed And Variable Cost
    own thoughts and views. Fixed Cost and Variable Cost The building rent cost is the fixed cost. Reason being is because the total annual cost of $9,000 for rent...
  • Accounting Fixed And Variable Costs
    the variable cost per unit will remain the same, but the variable cost will increase overall. If the variable cost per unit is 65 cents, the total annual cost will...
  • How Do Variable Costs And Fixed Costs Differ?
    cost is whatever you chose not to do. Practice Exercise 15-8 Fixed Costs and Variable Costs Which of the following is an example of a variable cost...
  • Fixed And Variable Costs
    variable costs because the cost will vary based on production of hamburgers. A variable cost is a cost that will change in direct proportion to changes in the cost...
Join Now!