Ba 225 Week 4

BA 225 WEEK 4

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Product Description

BA 225 WEEK 4,

Week 4 Discussion Questions

Question A

What approach should be used to calculate the breakeven point of a company that has many products?

Question B

How is the contribution margin per unit of limited resources computed?

Week 4 Discussion Questions

Question A

What approach should be used to calculate the breakeven point of a company that has many products?

Question B

How is the contribution margin per unit of limited resources computed?Indirect labor is a variable cost because it increases in total directly and proportionately with the change in the activity level. Supervisory salaries is a fixed cost because it remains the same in total regard¬less of changes in the activity level. Maintenance is a mixed cost because it increases in total but not proportionately with changes in the activity level.

BE5-2

VARIABLE COST

Relevant Range FIXED COST

Relevant Range

$10,000 $10,000

8,000 8,000

6,000 6,000

4,000 4,000

2,000 2,000

0 20 40 60 80 100 0 20 40 60 80 100

Activity Level Activity Level

Indirect labor is a variable cost because it increases in total directly and proportionately with the change in the activity level. Supervisory salaries is a fixed cost because it remains the same in total regard¬less of changes in the activity level. Maintenance is a mixed cost because it increases in total but not proportionately with changes in the activity level.

BE5-2

VARIABLE COST

Relevant Range FIXED COST

Relevant Range

$10,000 $10,000

8,000 8,000

6,000 6,000

4,000 4,000

2,000 2,000

0 20 40 60 80 100 0 20 40 60 80 100

Activity Level Activity Level

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