COMMERCE 2AB3 Study Guide - Midterm Guide: Cost Driver, Pro Rata, Status Quo

• School: McMaster University
• Department: Commerce
• Course: COMMERCE 2AB3
• Professor: Mohamed M Shehata

Document Summary

Multiple product case: more than one product with different sp, cm, fc assume sales mix is constant. Sales mix: the relative proportions in which a company"s products are sold. Number of packages for target profit = (fc + target profit) / (cm/package) Number of units for target profit = (fc + target profit) / (wacm/unit) Wacm/unit = sum (cm/unit p * weight p) = (total cm/package) / total # units in package. Total sales $ from all products for target profit = (fixed expenses + target profit) / wacm. Wacm% = sum (cm% p * %sales of p in total sales) = (total cm/package) / (total. Purpose of any product costing system is to calculate the cgs and cost of ei. Costing systems: job-order heterogeneous products, wip each customer, costs accumulated by jobs/orders, in process homogeneous products, wip each process, costs accumulated by process/department.