User Account

All Pages

What a fixed or non-fixed variable cost is

Assignment Help Managerial Accounting
Reference no: EM132524014

On your day off you are talking with a friend who mentions that she is looking into starting up a new business venture and wants your input. The friend is thinking about starting a small business she read about on the internet. The advertisement indicated that you would "be your own boss", "only need to sell 10 units to breakeven" & "low fixed costs". She says that it seems like an easy side gig but admits that she is unsure what breakeven point is & or even what a fixed or non-fixed variable cost is?

You indicate that you will do some research and you discover the following cost structure:

  • Inventory/month: $300
  • Royalty/unit - $10
  • Monthly license fee: $25
  • Advertising/unit - $12
  • Further information indicates that the owner of the rights insists that you charge $30/unit, with no ability to modify.

Required:

Question 1: A memo to your friend to explain breakeven point & the difference between fixed & variable costs.

Question 2: A breakeven point calculation.

Question 3: To further help her, suppose you could charge whatever amount you like, what would you have to charge per unit to breakeven at 10 units sold on a monthly basis provide a calculation?

Reference no: EM132524014

Questions Cloud

Calculate the size of monthly payment : Calculate the size of each monthly payment and then prepare loan amortization schedule to show that as time passes the amount paid in interest by your client
What the payback period of the investment is closest to : What The payback period of the investment is closest to? Rents Corp. is considering a project that would require an initial investment of $280,000
What is the time value of money : What is the time value of money? Explain using the above scenario and draw a timeline depicting all the Cash flows associated with Obrien's view of the retirem
Find the method of moments estimator : Find the method of moments estimator - Derive, using the log-likelihood function, the maximum likelihood estimate of the parameter p
What a fixed or non-fixed variable cost is : What a fixed or non-fixed variable cost is? A memo to your friend to explain breakeven point & the difference between fixed & variable costs.
What is the expected total power costs for May : If it is estimated that 10,000 factory machine hours will be used in the month of May, what is the expected total power costs for May
Covariance between the two data series equals : The correlation between these two data series = 0.2 The covariance between the two data series equals.
Compute return ignoring the effect of exchange rate : What was her holding period return in U.S. dollars? Compute her return ignoring the effect of exchange rate.
Solve the net advantage for product f : Solve the net advantage (disadvantage) of further processing. Use a negative sign to indicate a net disadvantage (if applicable).

Reviews

Write a Review

Managerial Accounting Questions & Answers

  What is cost of goods manufactured

Beginning work in process inventory is $20,000; total manufacturing costs are $21,000; and ending work in process inventory is $24,000

  What is highest direct labor rate per hour that walton toy

What is the highest direct labor rate per hour that Walton Toy Company would be willing to pay for additional capacity (that is, for added direct labor time)?

  Compute a predetermined overhead rate for the plant

Compute a predetermined overhead rate for the plant as a whole based on machine hours. Round your answer to two decimal places.

  How the firms accounting information system

Determine what advances in accounting and / or information technology could have prevented the event from occurring. Provide support for your argument

  Describe what you understand by the accounting concepts

BUACC2603 CORPORATE ACCOUNTING. With reference to the above statement describe what you understand by the accounting concepts mentioned and provide examples from your selected annual report

  Scheduled purchases of raw materials for second quarter

The TS Company has budgeted sales for the year as follows:

  Wayward company wants to prepare interim financial

Wayward Company wants to prepare interim financial statements for the first quarter.

  Calculate expected profit for each price

Calculate expected profit for each price. Which price maximizes company profit?

  Compute average collection period and accounts receivable

Compute the Average collection period. (Use 365 days in a year. Round your intermediate calculations and final answer to 2 decimal places.)

  Compute the costs and profit for each wedding

Find Would Caesars be likely to use a job costing system or a process costing system for determining the costs and profit for each wedding? Explain.

  Calculate a budget income statement for each department

Calculate a budget income statement for each department and a consolidated total income statement to determine operating income.

  Exercise 6-2lyle okeefe invests 30300nbspatnbsp10 annual

exercise 6-2lyle okeefe invests 30300nbspatnbsp10 annual interest leaving the money invested without withdrawing any of

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd