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Are selling expenses fixed or variable cost?
selling expenses is a mixed costs. it is a mixture of both fixed and variable components. for example, in selling expenses in a retail shop; fixed costs are the employees salary. while variable cost will be their commission or bonus of the sale.
How do you calculate transfer pricing?
The transfer price should be equal to the variable costs of the goods or services, plus the contribution margin per unit that is lost. =variable costs+(selling price-variable costs)
Why aren't selling and administrative costs not included in variable costing?
Selling and administrative costs are not included in variable costing because variable costing focuses solely on the direct costs associated with producing goods, such as direct materials and direct labor. These costs are variable in nature and fluctuate with production levels. In contrast, selling and administrative expenses are typically considered fixed costs, as they do not change directly with production volume and are incurred regardless of how much is produced. By excluding these costs, variable costing provides a clearer picture of the contribution margin related to production activities.
How do you calculate mark-up on total variable costs?
To calculate mark-up on total variable costs, first determine the total variable costs associated with producing a product. Next, decide on the desired mark-up percentage. Multiply the total variable costs by the mark-up percentage to find the dollar amount of the mark-up, then add this amount to the total variable costs to arrive at the selling price. For example, if total variable costs are $100 and the desired mark-up is 25%, the selling price would be $100 + ($100 x 0.25) = $125.
Is selling and distribution costs fixed or variable costs?
Selling and distribution costs are typically considered variable costs because they fluctuate with the level of sales or production. For instance, expenses like commissions, shipping, and packaging often increase as more products are sold. However, some components, such as salaries of permanent sales staff, can be fixed costs. Overall, the classification depends on the nature of each specific cost within the selling and distribution category.
Under variable costing variable selling and administrative costs are included in product costs?
No. They are not.they are part of period costs.
Firms with a high degree of operating leverage are?
Have a high amount of fixed costs relative to their variable costs. DOL= CM / Net Income We derive CM by the eqaution of Selling Price - Variable Costs If a firm has high variable costs relative to their selling price then they will have a small CM and therefore their DOL will decrease. Have a high amount of fixed costs relative to their variable costs. DOL= CM / Net Income We derive CM by the eqaution of Selling Price - Variable Costs If a firm has high variable costs relative to their selling price then they will have a small CM and therefore their DOL will decrease.
Are selling expenses fixed or variable cost?
selling expenses is a mixed costs. it is a mixture of both fixed and variable components. for example, in selling expenses in a retail shop; fixed costs are the employees salary. while variable cost will be their commission or bonus of the sale.
Are selling and administrative expenses treated as product costs or as period costs under variable costing?
Period Costs.
Are selling and administrative expenses treated as product costs or period costs under variable costing?
Period Costs.
How do you calculate transfer pricing?
The transfer price should be equal to the variable costs of the goods or services, plus the contribution margin per unit that is lost. =variable costs+(selling price-variable costs)
Why aren't selling and administrative costs not included in variable costing?
Selling and administrative costs are not included in variable costing because variable costing focuses solely on the direct costs associated with producing goods, such as direct materials and direct labor. These costs are variable in nature and fluctuate with production levels. In contrast, selling and administrative expenses are typically considered fixed costs, as they do not change directly with production volume and are incurred regardless of how much is produced. By excluding these costs, variable costing provides a clearer picture of the contribution margin related to production activities.
How do you calculate mark-up on total variable costs?
To calculate mark-up on total variable costs, first determine the total variable costs associated with producing a product. Next, decide on the desired mark-up percentage. Multiply the total variable costs by the mark-up percentage to find the dollar amount of the mark-up, then add this amount to the total variable costs to arrive at the selling price. For example, if total variable costs are $100 and the desired mark-up is 25%, the selling price would be $100 + ($100 x 0.25) = $125.
Is selling and distribution costs fixed or variable costs?
Selling and distribution costs are typically considered variable costs because they fluctuate with the level of sales or production. For instance, expenses like commissions, shipping, and packaging often increase as more products are sold. However, some components, such as salaries of permanent sales staff, can be fixed costs. Overall, the classification depends on the nature of each specific cost within the selling and distribution category.
How do you calculate breakeven point?
breakeven point (units) = fixed costs/contribution contribution = selling price - variable costs per unit
Is direct material a selling cost?
is direct cost a? Selling cost, manufacturing costs, direct, manufacturing cost indirect, general and administrative cost, fixed cost , variable cost, is direct cost a? Selling cost, manufacturing costs, direct, manufacturing cost indirect, general and administrative cost, fixed cost , variable cost,
Using above data ; Determine the break-even?
To calculate the break-even point, you need to know the fixed costs, variable costs per unit, and the selling price per unit. Break-even point (in units) = Fixed Costs / (Selling Price per Unit - Variable Cost per Unit) Without specific values for fixed costs, selling price per unit, and variable cost per unit, I can't provide you with an exact break-even point. Please provide these values, and I'll be happy to help you calculate the break-even point.
