a)Why "inspection cost" is treated as direct cost?

b)"Pension and health benefits" are classified as product costs and not period costs.

c)"Benefits" are classified as manufacturing overhead costs rather than direct labor.

What is CVP analysis? Describe the relationship between cost-volume and profit.

What are the advantages and disadvantages of using CVP analysis as a managerial accounting technique?

Explain:

a)Contribution Margin (CM) Ratio

b)Variable cost ratio

c)Break-even point (in pesos or units)

d)Margin of safety ratio

e)What causes changes in net income

f)Degree of operating leverage

g) Explain basic cost-volume-profit assumptions and limitations

Why are pension and health benefits classified as product costs and not period costs? Also explain why these benefits are classified as manufacturing overhead costs rather than direct labor.

Assuming that you are preparing a seminar on cost-volume-profit analysis for non-accountants. Several potential attendees have approached you and have asked why they would be interested in learning about your topic. Individuals include:

a.A factory worker who serves as her company labor union representative is in charge of contract negotiations.

b.A purchasing agent in charge of ordering raw materials for a large manufacturing company.

c.A vice president of sales for a large automobile company.

d.A dean

What unique reasons would you give each of these individuals to motivate them to come to your seminar?

Why do French fries from Mcdonald's taste different than those from Burger King? Somebody explained that much of the taste difference has to do with the design of the deep fryer. A raw material for a new job enter the manufacturing process, and production machines communicate with central computers via an Ethernet cable to automatically download a set of specifications tailored specifically to ensure the customer order is being filled. When a job is finished, the computer downloads a new set of instructions for the next order in the queue. The technology that enables companies to efficiently and effectively change design specifications without delay is called machine-to-machine communications (M2M) as manufacturing companies look to reduce overhead costs, and M2M is certain to play a growing role in many industries.

Instructions: Discuss how M2M can help a manufacturing company reduce manufacturing overhead and increase profitability.