HTM 2030 Chapter Notes - Chapter 3: Fixed Cost, Income Statement, Cost Accounting

• School: University of Guelph
• Department: Hospitality and Tourism Management
• Course: HTM 2030
• Professor: William Murray

Document Summary

Carrying over from last week : is discipline the only control technique that had negative implications, no, all control techniques could have negative implications, e. g. The c/v/p relationship is based on two key points: 1. Fixed costs exist, regardless of sales volume: 2. The relationship (%) between variable costs and sales remains relatively constant: expressed in dollar terms, both variables increase or decrease in tandem. Find vr when given: sales price = . 37/unit, total fc = ,408, total unit sales = 19,364 (customers, people, etc. , total profit - ,952. 80, variable costs = . 70/unit. Total sales = . 37 x 19,364 = ,988. 68. Vc = ,988. 68 - ,408 - ,952. 80 = ,627. 88. Contribution rate: find cr when given: Cr = 1 vr = 1 0. 397 = 0. 603: find cr when given: Total fc = ,137: total sales = . 50 x 18,440 = ,260. Vc = ,260 - ,137 - ,381. 80 = ,741. 20. Cr = 1 vr = 1 0. 443 = 0. 557.