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Identify Overhead Costs 2. Identify Cost Drivers 3. Calculate AR Cost/Driver
Identify Overhead Costs 2. Identify Cost Drivers 3. Calculate AR Cost/Driver
Identify Overhead Costs 2. Identify Cost Drivers 3. Calculate AR Cost/Driver
Machinery, Main., Energy 14000 Mhrs Used 10000 1.4 per mhr
ASSUME ALL OH EXCEPT MACHINERY, MAINTENANCE AND ENERGY ARE FIXED (TOTAL FC = 46000)
BREAK EVEN POINT ANALYSIS (Allocated FC)
Blue Black Red Purple
Total Units Sold 50000 40000 9000 1000
SP per unit 1.50 1.50 1.55 1.65 BEP Point = Total FC/CM p.u.
Variable Cost
Direct Material 0.50 0.50 0.52 0.55
Direct Labor 0.20 0.20 0.20 0.20 DL Per Hr 10
Mch., Maint., Energy 0.14 0.14 0.14 0.14
Contribution Margin 0.66 0.66 0.69 0.76
Allocated FC 17025 13031 12357 3586 46000 Total FC
BEP units 25796 19744 17909 4718