A professional services business has fixed costs of €150,000 and variable costs of €15 per hour. How much does average cost change between 12,000 or 15,000 units?

A professional services business has fixed costs of €150,000 and variable costs of €15 per hour. How much does average cost change between 12,000 or 15,000 units?

Q10-4: Use the following information to determine the breakeven in units, breakeven in £, the number of units to get close to the Target Profit, and the amount of £ estimated from the unit sensitivity analysis:

Fixed costs= £240,000

Selling price per unit= £18.00

Variable costs per unit= £12.60

Target profit= £120,000

Q10-5: Looking at Q10-4above, if expected sales are 50,000 units what is the margin of safety?

Q10-6: BCD Inc sells its products for $12 each. The company’s volume has remained unchanged for some time at 10,000 units per month although it has spare capacity. Production costs are $10 per unit including fixed costs which average $3 per unit for the production volume. A customer has requested a special order of 2,000 of BCD’s products at a special price of $9. What should BCD do? Please show your work.

Q11-1: Define standard cost.

Q11-2: Compare job costing with process costing.

Q11-3: Little Known Tax, Ltd prepares tax returns for clients. The firm employs six bookkeepers who cost the firm £10,000 in total each week. Each bookkeeper is expected to charge 30 hours per week to client jobs. At the end of the week the total hours charged by the six bookkeepers to client jobs is 150. How much is spare capacity?

Q11-4: Last Group has a rental cost of €25,000 per month with a four-year lease term. Casual staff are employed on a weekly basis to carry out telephone sales. The cost of casual staff is €12,000 per month and telephone call costs are €5,000 per month. An offshore call centre has offered to carry out the telephone sales activity from its own premises and using its own staff and telephone services for a fixed payment of €15,000 per month. Should Last Group accept or reject the outsourcing proposal from the call centre? Please show all calculations.

Q12-1: An accounting consultant is paid a salary of £80,000 per annum and his employer pays up to of 18% of base salary for medical, life, and dental insurance. His employer also contributes toward a retirement plan at a maximum of 8% of base salary. Assuming the consultants works 250 days per year and is productive for 81% of that time, what is his daily cost rate?

Q12-2: Upper Central Consultancy (UCC) wishes to bid for a market research project. The cost estimates on which UCC will base its bid are shown below:

275 hours work in initial data collection and preparation of research questionnaire. The hours are broken down as follows:

Explanation & Answer

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