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Changes in Variable Cost and Selling Price per Unit
The contribution sales ratio is affected by any change in variable cost or selling price per unit. This ratio is a measure of the rate at which profit is being earned and its size demonstrated via the steepness of the slope of the profit volume graph
Line xy displayed the existing profit curve for a company
Fixed costs = OY
The profit at sales volume OS = SX;
Break-even point happens at point B and the margin of safety = M
A rise in selling price and/or a falls in variable cost per unit will rises the contribution; sales ratio resulting in a new point curve yx
A falls in selling price and/or increase in variable cost per unit will decrease contribution; sales ratio resulting in a new profit curve yx2.
Budgeted direct labour cost 75000 hours @ $16 per hour Budgeted manufacturing overhead 80 000 hours @ $17.50 per hour Actual direct labour cost $997 500 Budgeted manufa
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A fixed cost is a cost which can't be easily identified or related to a cost per unit or activity of any kind for example a cost which remains constant when production of a service
company XY produces a single product ''XY1" selling price per unit 15, direct materials per unit 4 direct labour per unit 3 variable overhead per unit 2 fixed overhead incurred 12
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Choice of Budget Flexing Basis The most suitable flexing basis must be considered where it assists in the comparison of alternative budget data at the planning stage and for
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