## Absorption costing, marginal costing and break even analysis, Financial Accounting

Assignment Help:
• Absorption costing is a cost accounting method that tries to charge all direct costs and all production costs of an organization to specific units of production. Managerial decisions cannot be taken with the help of absorption costing.

• Marginal costing, also known as variable costing, takes into accounts only variable costs as product cost. By showing the variable cost and contribution for each product, marginal cost helps the management in taking appropriate decisions.

• Marginal cost is the cost incurred on producing an additional unit. Contribution is nothing but the difference between the sales value and the marginal or variable cost of the product. This contribution covers the fixed cost and generates profit.

• The profitability of the operation of a business can be known with the help of profit/volume ratio. It establishes the relationship between contribution and sales.

• A break even point is a point at which a firm earns no profit and does not bear any loss. It is a point at which the total sales are equal to total costs. In other words, contribution is sufficient to cover only fixed cost.

• CVP Analysis is useful for taking decisions like fixation of selling price, effect of change in price, alternative methods of production, alternative course of action etc.

• The break even chart is primarily drawn to understand the relationship between the costs/sales and profit at various levels of activity. The main feature of the break even chart is that it shows the break even point and the profits and loss at different levels of activities. The profit-volume chart describes the profit and loss of business at different levels of sales. In other words, it is the representation of the facts in the break even chart.

#### Determine the present value or worth of a bond, 1.) Assume a \$1000 face val...

1.) Assume a \$1000 face value bond has a coupon rate of 8.5 percent, pays interest semi-annually, and has an eight-year life. If investors are willing to accept a 10.25 percent rat

#### Please show work so i can follow, a. Conversion cost was 140,000 and was fo...

a. Conversion cost was 140,000 and was four times the prime cost b. Direct materials used in production equaled 5,000 c. Cost of goods manufactured was 154,000 d. Ending work in pr

#### Assignment, Internal Rate of Return

Internal Rate of Return

#### A prior period adjustment, Q. A prior period adjustment that corrects incom...

Q. A prior period adjustment that corrects income of a prior period requires that an entry be made to a. an income statement account. b. a current year revenue or expense account.

#### Looking for final acounts, Looking for Income Statement and Balance Sheet f...

Looking for Income Statement and Balance Sheet for the Better USA, Inc. company for 2010 and 2011 There are two sets of numbers, after each category. The first will represent 2010

#### Real estate mortgage investment conduit, Real Estate Mortgage Investment Co...

Real Estate Mortgage Investment Conduit (REMIC) - An entity which holds a fixed pool of mortgages and issues multiple classes of interest in itself to investors. A qualified REMIC

explain virement

#### Compute basic and diluted earnings per share, The following information was...

The following information was taken from the books and records of Ludwick, Inc.: 1. Net income \$ 280,000 2. Capital structure: a. Convertible 6% bonds. Each of the 300, \$1,000 bond

#### Qualitative characteristics , Since 1968, Dracula Limited has traded in Don...

Since 1968, Dracula Limited has traded in Doncaster, South Yorkshire as a manufacturer of fancy-dress and theatrical costumes. It produces a wide range of general theatrical costum

#### What is the pretax stock compensation, Refer to the Consolidated Statements...

Refer to the Consolidated Statements of Shareholders' Equity (pp. 62-63), Consolidated Statements of Cash Flow, including an abstract from Note 2, Cash Flow Information (pp. 61 and

### Write Your Message!

#### 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