
Fundamentals of Cost Accounting 2nd Edition by William Lanen, Carolyn Wells, Michael Maher
النسخة 2الرقم المعياري الدولي: 978-0077274993
Fundamentals of Cost Accounting 2nd Edition by William Lanen, Carolyn Wells, Michael Maher
النسخة 2الرقم المعياري الدولي: 978-0077274993 تمرين 14
Analysis of Cost Structure
Foxx Company's cost structure is dominated by variable costs with a contribution margin ratio of.25 and fixed costs of $100,000. Every dollar of sales contributes 25 cents toward fixed costs and profit. The cost structure of a competitor, Beyonce, Inc., is dominated by fixed costs with a higher contribution margin ratio of.80 and fixed costs of $400,000. Every dollar of sales contributes 80 cents toward fixed costs and profit. Both companies have sales of $600,000 per month.
Required
a. Compare the two companies' cost structures using the format shown in Exhibit 3.5.
b. Suppose that both companies experience a 20 percent increase in sales. By how much would each company's profits increase
Foxx Company's cost structure is dominated by variable costs with a contribution margin ratio of.25 and fixed costs of $100,000. Every dollar of sales contributes 25 cents toward fixed costs and profit. The cost structure of a competitor, Beyonce, Inc., is dominated by fixed costs with a higher contribution margin ratio of.80 and fixed costs of $400,000. Every dollar of sales contributes 80 cents toward fixed costs and profit. Both companies have sales of $600,000 per month.
Required
a. Compare the two companies' cost structures using the format shown in Exhibit 3.5.
b. Suppose that both companies experience a 20 percent increase in sales. By how much would each company's profits increase
التوضيح
a.
Comparison of cost structures of two ...
Fundamentals of Cost Accounting 2nd Edition by William Lanen, Carolyn Wells, Michael Maher
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