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Can someone help you solve this breakeven problem The break even sales revenue for a product costing 25 per unit is 550000 If budgeted sales are 10000 units what is the margin of safety?
Wiki User
∙ 12y ago
Break Even is when:
(units x selling price) = (units x cost per unit) + Fixed Costs
There is not enough information to calculate a margin of safety; however, based on the information supplied:
550,000 = (10,000 x 25) + Fixed Costs
300,000 = Fixed Costs
Wiki User
∙ 12y ago
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Can someone help me solve this breakeven problem The break-even sales revenue for a product costing 25 per unit is 550000 If budgeted sales are 10000 units what is the margin of safety?
Budgeted sales = 10000 * 25 = 250000 breakeven sales = 550000 margin of safety = 550000 - 250000 = -300000
Why do you need product costing system?
needs of product costing system
What is by product costing costing?
Product cost accuracy is a term used in the accounting field. It essentially defines the amount of money it actually costs to produce a product.
What costing method considers variable factory overhead a product cost?
variable costing
Distinction between standard costing and actual costing?
Standard costing is process of determining the standard price require to produce one unit of product while actual costing system uses the actual prices of manufacturing one unit of product.
Can someone help me solve this breakeven problem The break-even sales revenue for a product costing 25 per unit is 550000 If budgeted sales are 10000 units what is the margin of safety?
Budgeted sales = 10000 * 25 = 250000 breakeven sales = 550000 margin of safety = 550000 - 250000 = -300000
Why do you need product costing system?
needs of product costing system
How is target costing used to price products?
traditionally cost plus procedure were used means at the time of pricing the product we accumulated the cost(direct material+direct labor+direct expenses+variable production OH+fixed production OH)that has to be incurred in order to produce the product and determined the cost per unit and then add the profit margin to reached at the selling price this method of costing is precised for its simplicity but in 1960 the concept of target costing were introduced which tells us the opposite approach as compared to the traditional costing in target costing we starts from the market survey and determine at what selling price costumer is agree to buy the product which we want to produce after determining the selling price of the product we subtract the desired profit which we want to achieve from it(competitive selling price-desired profit=target cost) after subtracting the desired profit from the selling price we left with the cost termed as the TARGET COST. after setting of the target cost we look all the budgeted cost if budgeted cost is greater than the target cost we apply all the cost saving techniques to control the budgeted cost and keep the budgeted cost into the limits of target cost... (ANSWERED BY ARSALAN IDREES)
Is breakeven attained in the growth stage of the product life cycle?
yes
When is a job order costing system more appropriate than a process costing system?
Job order costing is more appropriate than process costing when the product being produced is a custom product
What is by product costing costing?
Product cost accuracy is a term used in the accounting field. It essentially defines the amount of money it actually costs to produce a product.
What costing method considers variable factory overhead a product cost?
variable costing
Distinction between standard costing and actual costing?
Standard costing is process of determining the standard price require to produce one unit of product while actual costing system uses the actual prices of manufacturing one unit of product.
Role of target costing?
Target costing refers to the design of a product and the processes used to produce it , so the ultimately the product can be manufactured at a cost that will enable the firm to make a profit when product is sold
What is the difference between target costing and life cycle costing?
In Target costing system, comapnies tries to achieve target prices by reducing those parts of activity which are not increasing the value of product. Life cycle costing is a concept in which companies tries to read the overall process of development of product life cycle and tries to minimise the cost at area where it is not required or not increase the value of product.
What is the absorption costing?
All cost associated with a particular product.
What are the differences between activity-based absorption costing system and traditional absorption costing system?
An activity-based absorption costing system defines the cost by how many activities a product unit uses. A traditional absorption costing system defines the cost by how much money went into making the product unit.
