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
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
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
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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