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Marginal versus variable costing?
Variable cost refers to the TOTAL variable cost of all units, whereas marginal cost is the variable cost of the last unit only. Variable cost is the sum of all the individual marginal costs. The derivative of the Variable Cost is the Marginal Cost. The integral of the Marginal cost is the Variable Cost.
Is wealth a stock or flow variable?
Wealth is a stock variable because it represents the total value of assets owned at a specific point in time, rather than a flow variable which measures the change in value over a period of time.
Formula for total variable cost?
Total Variable Cost = Number of Units * Variable cost per unit
How do you calculate Total Cost without Total variable cost?
To calculate the Total Cost without Total variable cost, one should estimate for the variables or substitute for the variables with a variable such as X or Y and then solve for the approximate total cost.
Is selling price and total variable cost the same?
Selling price = Total Cost (Total Variable cost + Total fixed cost) + profit margin
What is per unit costing?
Variable cost per unit= Total Variable costs($ amount) divided by Production units
What is Absorption Costing and how is it different from Variable Costing?
Absorption Costing (also known as traditional costing approach or full costing) absorbs all costs incurred to produce goods, which can result in misleading product cost information for decision-making. In absorption costing, fixed overheads are considered as product cost. These are added in the cost of inventory and not shown as separate item (period cost) in the income statement. The full cost includes cost of direct materials, direct labor, variable manufacturing overheads and fixed overheads. The absorption costing focuses only on total cost viz. variable and fixed and it is not useful for managers to take decision, plan about future and exercise control. The cost volume profit relationship is ignored because it takes into account the total cost. Absorption costing is suitable only in those companies where equal number of units are produced and sold. However, a business operates in a dynamic environment and production and sales keep on fluctuating on a regular basis. Therefore, as absorption costing is used in such a scenario, the cost will keep on fluctuating...
How do you calculate restaurant profit?
Restaurant Gross profit = Total generated revenue - total costing *total costing = fixed assets, stock in hand, manpower, utilities, rental and maintenance. *Gross profit=Revenues-Variable costs-fixed costs
Marginal versus variable costing?
Variable cost refers to the TOTAL variable cost of all units, whereas marginal cost is the variable cost of the last unit only. Variable cost is the sum of all the individual marginal costs. The derivative of the Variable Cost is the Marginal Cost. The integral of the Marginal cost is the Variable Cost.
How do you you calculate total revenue percentage?
You can calculate the total revenue percentage by substituting the variable X for the monthly revenue, the variable Y for the period of time, and then multiple these to solve for the total revenue percentage.
When to use marginal costing?
Marginal costing is the method of costing for evaluating the changes in total cost due to change in number of units produced.
What is the total for items costing 149.99 with a sales tax of 5.75 percent?
find the total for items costing $149.99 with sales tax of 5.75%
What is the Importance of marginal costing in decision making?
Marginal cost is change in total cost due to increase or decrease one unit or output. It is technique to show the effect on net profit if we classified total cost in variable cost and fixed cost.
What is the meaning of absorption and example of it?
I'm assuming you are talking about Absorption costing which is essentially the opposite of Variable Costing. Absorption Costing: Where all costs (Direct and Indirect) related to producing (Not Selling & Admin) a product are distributed evenly into the cost of the goods. Lets say we only used $5 worth of materials and $2.50 worth of labour to make a doll. There is also $1000 worth of fixed expenses related to making the doll. Under Variable Costing: the cost of making a doll is only the variable costs. Hence, the cost of 1 doll is 5+2.50 = $7.50/doll Under Absorption costing: Lets say we made 100 dolls ($10/doll worth of Fixed costs). The total cost of a doll would therefore but 5 + 2.50 + 10 = $17.50/doll I guess you could say that it absorbs the ALL the costs of manufacturing.
Is wealth a stock or flow variable?
Wealth is a stock variable because it represents the total value of assets owned at a specific point in time, rather than a flow variable which measures the change in value over a period of time.
What information provided by a variable costing income statement is used in computing the break even point?
In a variable costing income statement, the key information used to compute the break-even point includes the contribution margin per unit and fixed costs. The contribution margin is calculated as sales revenue minus variable costs, and it indicates how much each unit sold contributes to covering fixed costs. The break-even point is reached when total contribution margin equals total fixed costs, allowing for the determination of the number of units that need to be sold to break even.
What is the main difference between activity based costing and attribute based costing?
activity based costing does not promote TQM(total quality management) and continuous improvement but attribute based costing promotes the both.
