Calculate the breakeven fee income, Cost Accounting

Assignment Help:

A company provides several different services to its customers from a single office. Fixed costs of the office, including staff costs, are absorbed into the company's service costs using  an  absorption  rate  of  $25  per  consulting  hour  based  on  a  budgeted  activity  level  of 100,000 hours each period.

Variable costs and fee income are different depending on services provided, however the average contribution to salesratio is 35%. Calculate breakeven fee income?

Solution:

Calculate the breakeven fee income.

Break-even revenue= Fixed overhead / C/S ratio

Therefore: $2,500,000 / 0.35 = $7,142,857


Related Discussions:- Calculate the breakeven fee income

Evaluate amount of goodwill should horace wimp record, Blue sky Company's 1...

Blue sky Company's 12-31-13 balance sheet reports assets of $5,000,000 and liabilities of $2,000,000. All of the book value's are the same as the market values except for land, wh

Demerits of break even point, DEMERITS OF BREAK EVEN POINT 1. It pays n...

DEMERITS OF BREAK EVEN POINT 1. It pays no attention to considerations like effect of government policy changes, changes in the marketing environment etc 2. Fixed cost, enti

Calculate the reduction in failure costs per unit, Each unit of a product r...

Each unit of a product requires four components. The average number of components is 4.25 due to component failure. Purchasing higher quality components can reduce the average numb

Determine the expected range of returns , Series Arithmetic Mean ...

Series Arithmetic Mean Standard Deviation   Small-company stocks 15.9  % 32.8  %   Large-company

Prepare an income statement, Mrs. M. Botham is a sole trader, selling a var...

Mrs. M. Botham is a sole trader, selling a variety of fashionable clothing materials. Her business year end is 31 December 2011. You have been given the following trial balance

Case study, Managerial ACCT 2 Ulrich Framing is well known for the quality ...

Managerial ACCT 2 Ulrich Framing is well known for the quality of its picture framing. Lucinda Ulrich, CEO, believes that the number of linear feet or framing used is the best is t

How to calculate the cost per unit for each product , Asian Ltd makes three...

Asian Ltd makes three types of gold watch - the Diva (D), the Classic (C) and the Poser (P). A traditional product costing system is used at present; although an activity based cos

#investment appraisal techniques, #what is the formula for calculating payb...

#what is the formula for calculating payback period and what are its limitations ?

Variable overhead variance, Variable Overhead Variance This is the dis...

Variable Overhead Variance This is the dissimilarity between the variable overheads absorbed and the actual variable overheads warned. Therefore it can be described as the und

Write Your Message!

Captcha
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!

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