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Sales Commission varies with volume of sales that's why it is a variable cost as much the sales as much the sales commission, high sales high sales commission and vice versa.
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Is sales promotion cost a variable cost?
If it varies with the level of production then it is variable cost otherwise it is fixed cost.
Why are sales commissions a variable cost?
Sales commission is a variable cost because the amount of the account is subject to variation. Think about it: A used car salesman is paid a commission say of $500 for every car he sells for the month of October. If he sells only 2 cars, then the sales commission is $1000, If he sells a whopping 12 cars, then the sales commission is $6000!! Notice the variation in commission?? This is why it is a variable cost - because it is not a fixed cost, which you know regardless of what happens during the period.!
How do you calculate breake even sales knowing only total sales and variable cost and fixed cost?
Formula for breakeven point = Fixed Cost / Contribution margin Contribution margin = Total Sales - variable cost SO using above mentioned formula break even sales can be found.
How do calculate break even point?
Break even point = Fixed cost / Contribution margin ratio Contribution margin ratio = (sales - variable cost ) / Sales
Break Even Sales - Formula in Cost Accounting?
Breakeven point = Fixed Cost / Contribution margin Contribution margin = (Sales - Variable cost) / Sales
Is commissions a fixed or variable costs?
Sales Commission varies with volume of sales that's why it is a variable cost as much the sales as much the sales commission, high sales high sales commission and vice versa.
Is sales promotion cost a variable cost?
If it varies with the level of production then it is variable cost otherwise it is fixed cost.
How do you calculate your variable cost and fixed cost given total costs and sales volumes?
Total Costs = Fixed Cost + Variable Cost soVariable Cost = Total Costs - Fixed Cost.
What is V ratio?
The Profit Volume (PV) Ratio is the ratio of Contribution over Sales. It measures the Profitability of the firm and is one of the important ratios for computing profitabilty. The Contribution is the extra amount of sales over variable cost. Contribution is also Fixed cost plus profit. Profit = Sales - Variable Cost - Fixed Cost. Thus Contribution is: Profit + Fixed Cost = Sales - Variable Cost. Therefore PV Ratio = (Contribution/Sales)X100. (This as a percentage of sales)
Is Advertising fixed costs?
If advertising expense is fixed and has no concern with level of sales then it Is fixed but if it is changed with the change in level of sales then It is variable cost.
How do you calculate break even when you only have total sales total variable cost and total fixed cost no unit selling quantity given eg sales 500000 fixed cost 160000 and variable cost 350000?
You cannot. Sales and variable costs must be functions of the units (quantities) sold and produced.
Why are sales commissions a variable cost?
Sales commission is a variable cost because the amount of the account is subject to variation. Think about it: A used car salesman is paid a commission say of $500 for every car he sells for the month of October. If he sells only 2 cars, then the sales commission is $1000, If he sells a whopping 12 cars, then the sales commission is $6000!! Notice the variation in commission?? This is why it is a variable cost - because it is not a fixed cost, which you know regardless of what happens during the period.!
What is p v ratio?
The Profit Volume (PV) Ratio is the ratio of Contribution over Sales. It measures the Profitability of the firm and is one of the important ratios for computing profitabilty. The Contribution is the extra amount of sales over variable cost. Contribution is also Fixed cost plus profit. Profit = Sales - Variable Cost - Fixed Cost. Thus Contribution is: Profit + Fixed Cost = Sales - Variable Cost. Therefore PV Ratio = (Contribution/Sales)X100. (This as a percentage of sales)
How do you calculate breake even sales knowing only total sales and variable cost and fixed cost?
Formula for breakeven point = Fixed Cost / Contribution margin Contribution margin = Total Sales - variable cost SO using above mentioned formula break even sales can be found.
How do calculate break even point?
Break even point = Fixed cost / Contribution margin ratio Contribution margin ratio = (sales - variable cost ) / Sales
Break Even Sales - Formula in Cost Accounting?
Breakeven point = Fixed Cost / Contribution margin Contribution margin = (Sales - Variable cost) / Sales
How do you compute break even analysis?
breakeven = fixed cost / contribution margin ratiocontribution margin ratio = sales - variable cost / sales
