OPPapers.com Essay Index >> Business >> What Is Management Accounting
We have many free term papers and essays on What Is Management Accounting. We also have a wide variety of research papers and book reports available to you for free. You can browse our collection of term papers or use our search engine.
What is management accounting? What is Management Accounting? ... There are several
differences between financial and management accounting. ...
What is Management Accounting? ... Management accounting provides information for managers
in an organization (Horngren, Sundem, & Stratton, 2005). ...
The Differences Between Financial Accounting And Management Accounting.
Introduction Financial accounting and management accounting ...
The Evolution of Management Accounting. ... Reference: Kaplan, Robert S. The Evolution
of Management Accounting. The Accounting Review, Vol. 59, No. ...
strategic management accounting. What is Strategic Management Accounting?
And why, Strategic Management Accounting? Simple definition ...
Submitted by SPAWNM3 on July 16, 2006
Category: Business
Words: 559 | Pages: 3
Views: 309
Popularity Rank: 30,890
Average Member Grade: N/A (Add a Comment / Grade this Paper)
Variable costs are expenses that change in direct proportion to the activity of a business while the per-unit cost remains constant. For example, cost of goods sold, sales commissions, shipping charges, delivery charges. Fixed costs are expenses whose total does not change in proportion to the activity of a business. For example, a retailer must pay rent and utility bills irrespective of sales volumes.
For this example, we will be running a restaurant and analyze the fixed and variable costs associated with changes in sales. We will determine the cost per unit when sales are 1000 units, 6000 units and 8000 units respectively. The initial data given is:
Item: Raw Materials (cost for hamburgers)
Total Annual Cost: $650
Item: Building Rent
Total Annual Cost: $9000
The table below shows the cost per unit for each sale point (yellow highlights show amounts that were solved for):
Sales Volume Total variable (hamburgers) Variable
per-unit Total fixed (Rent) Fixed
per-unit
1000 $ 650.00 $ 0.65 $ 9,000.00 $ 9.00
6000 $ 3,900.00 $ 0.65 $ 9,000.00 $ 1.50
8000 $ 5,200.00 $ 0.65 $ 9,000.00 $ 1.13
The variable expense per unit would be figured by dividing the total variable expense by the number produced. In this example, $650 / 1000 yields a per-unit cost of $0.65. Therefore, in order to pay for the raw materials, each of the 1000 hamburgers would need to be sold for at least $0.65. In the same light, in order to pay the rent for the building (fixed cost) each of the 1000 hamburgers would need to be factored in to the cost of rent: $9000 / 1000 yields $9.00 per-unit to pay the fixed cost. To find the total variable cost when our sales increase to 6000 units, we multiply the constant, $0.65 by the total units. Working backwards, this gives us a total variable annual cost of $3900 for 6000 units. The amount then needed to be contributed per unit...
You must Login to view the entire paper.
If you are not a member yet, Sign Up for free!