BU247 Lecture Notes - Lecture 5: Fixed Cost, Contribution Margin, Variable Cost
Document Summary
3 49: answers (question in textbook: variable: carpenter labour to make shelves, wood, sales commissions, miscellaneous variable manufacturing overhead. Fixed: sales staff salaries, office and showroom rental exp. , depreciation, advertising, miscellaneous fixed, rent for building, depreciation. X = + f / p v. When answering questions sin this course, you may use any one of the following approaches to doing multiproduct cvp analysis: weighted average contribution margin, bundle approach (buy a package, substitution approach. Relevant cost: a cost or revenue that changes as a result of making a decision. The decisions considered: the make or buy decision, ex. By outsourcing, you save the manufacturing costs, but you have to pay the outside supplier. Save direct materials, direct labour and variable overhead. Unless you are told otherwise, fixed costs are not avoidable. Quantity: affects the image the company has. Delivery, time it takes to get to you: just in time delivery.
