Answer and Explanation:
Respected Sir,
Sub: Absorption costing to analyze product costs and subsequent cost-volume-profit decisions
As per your requirement please find the explanation below:
Absorption costing is a process by which we add part of the fixed overhead to the production expense of the goods. If we do on a per-unit basis. Here we will compute by dividing the fixed costs by the number of units that we built and sold over the era. Whereas Variable costing includes fixed overhead as a lump sum instead of a per-unit price.
Under this process, all your variable costs like equipment, raw materials, and shipping are included. We will add the maximum fixed overhead costs for the duration. Such costs are not calculated on a per-unit basis. Rather than we deduct them as a lump-sum expense from your income amount.
Variable costing is really useful as it reveals the earnings after all the expenses are paid for the accounting period. While you would not have earned revenue for the goods we purchased as some may be in the inventory, we are showing you have paid all of your expenses for the time. We have excess revenue when you actually sell the finished goods in the warehouse.
The absorption approach is not all that effective as absorption costing will inflate the income figures excessively in any given span of accounting. Since you're not going to subtract any of your fixed costs as we did not sell any of us produced goods, our profit and loss report doesn't reflect the maximum expenses you've had for the time. Therefore, these results may mislead us when our profitability is analyzed.
Regards
ABC
Answer:
$458,000
Explanation:
The computation of the total production cost in case of 85,000 toys are produced
The fixed cost is
= Total manufacturing cost - total variable cost
= $360,000 - $140,000
= $220,000
And, the variable cost per unit is
= $140,000 ÷ 50,000 toys
= $2.8
So for 85,000 toys, the total production cost is
= Fixed cost + Variable cost × variable cost per unit
= $220,000 + 85,000 toys × $2.8
= $220,000 + $238,000
= $458,000
<u>Answer:
</u>
The strategy that they should use should be that of negotiation.
<u>Explanation:
</u>
- In order to make the employees understand that they would be allowed to take the company phones and laptops to home but they would be required to carry out certain operations of the company work, it would be necessary to negotiate with them on the offer put forward by the company.
- This strategy would help the company even of a few employees agree to the offer as the operation time of the company would increase substantially.
Had to look for the options and here is my answer.
Based on the given scenario above regarding the product manager of Boat, the intervention that he can do in order to improve upon the buying criteria so that there would be a potential increase in demand is to "increase <span>the promotion budget to gain greater awareness."</span>
