Essay specific features
November 16, 2011
No of pages / words:
2 / 404
Rating of current essay:
We considered costs to be variable if the expenses on the income statement were directly influenced by revenue hours on Exhibit 1 in the case.
- Power cost per revenue hour is $4.70/hr
- Operations hourly personnel: $24.00/hr
Variable cost per revenue hour is $28.70/hr
- Price per unit is $400/hr internal and $800/hr external
- Intracompany contribution margin: $371...
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The next allowable hour will be a commercial hour; therefore we consider the contribution margin to be the commercial contribution margin of $771.30/hr.
Break-even occurs when revenue equals costs so we used the following equation:
Revenue = Variable Costs + Fixed Costs
205(400) + X(800) = (X+205)(28...
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