Change in fixed cost, Cost Accounting

Change in Fixed Cost

In graph yx shows the existing profit curve for a company along with a fixed cost OY break=-even point B, margin of safety M; profit SX whereas sales volume is OS. A change in fixed cost does not affect the contribution to sales ratio that is only influenced via variable cost and selling price per unit.

1255_Change in Fixed Cost.png

 

Line y1, x1 displays the new profit curve while fixed costs are reduced to OY1. The following must be noted

  • The profit at sales volume OS has raised to SX
  • Break-even point has been lowered to B
  • Margin of safety has been rise to M1
  • Contribution sales ratio is not changed
Posted Date: 2/7/2013 1:03:52 AM | Location : United States







Related Discussions:- Change in fixed cost, Assignment Help, Ask Question on Change in fixed cost, Get Answer, Expert's Help, Change in fixed cost Discussions

Write discussion on Change in fixed cost
Your posts are moderated
Related Questions
A firm uses capital and labor to produce a single output good. The production function is given by F(K, L) = K 2 L where K is the amount of capital and L is the amount of labor em

what are the advantages and disadvantages of marginal costs plus a fixed lump-sum fee?

Cost Estimation  Cost estimation may be defined with 'a study that attempts to predict among costs and the activity level or cost driver that causes those costs. In practical

what would your answer be to the following problem, please show detailed calculations: The XYZ Company manufacturers Part 123 for use in its production line. The manufacturering co

Advantage and Disadvantages of Zero Based Budgeting Advantages 1. Resources allocation is more efficient. 2. Focus attention on values for money and makes clear relat

Handy-Man Services is a repair-service company specializing in small household jobs. Each client pays a fixed monthly service fee based on the number of rooms in the house. Records

Atlanta Company stock is expected to follow an exponential growth rate. The relationship between the current stock price P0, future price PT after time T, and the continuously comp

Morrow Company applies overhead based on direct labor hours. At the beginning of the year, Morrow estimates overhead to be $620,000, machine hours to be 180,000, and direct labor h

You perform a travel cost study that looks at the relationship between the cost of visiting a lake (including costs of travel, value of time spent not working & any entry fees), it

Purposes of Overhead Cost Analysis There are a number of situations whether the analysis of overhead costs will assist in the satisfactory evaluation of the relevant cost data