૧૬jતાધા1. Using the high-low method, determine Bethany's variable and fixed operating cost components.2. Complete the contribution margin income statement for the business last month, when Bethany drove 3,080 miles. (Assufalls within the relevant range of operations).Complete this question by entering your answers in the tabs below.Required 1 Required 2Complete the contribution margin income statement for the business last month, when Bethany drove 3,080 miles. (Assumethis falls within the relevant range of operations).Note: Round your intermediate calculations to 2 decimal places and final answers to the nearest whole number.Bethany LiangContribution Margin Income StatementFor the Last MonthContribution marginNet operating income< Required 1Required 2 > Bethany Liang delivers parts for several local auto parts stores. She charges clients $3.65 per mile driven. She has determined that ifshe drives 2,800 miles in a month, her average operating cost is $3.45 per mile. If Bethany drives 5,600 miles in a month, her averageoperating cost is $2.30 per mile.Required:1. Using the high-low method, determine Bethany's variable and fixed operating cost components.2. Complete the contribution margin income statement for the business last month, when Bethany drove 3,080 miles. (Assume thisfalls within the relevant range of operations).Complete this question by entering your answers in the tabs below.Required 1 Required 2Using the high-low method, determine Bethany's variable and fixed operating cost components.Note: Round your cost per mile answer to 2 decimal places.Variable cost per mile drivenFixed cost

Variable costs are costs that vary with the change in the level of output whereas fixed costs are…

Answered: Bethany Liang delivers parts for…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Bethany Liang delivers parts for several local auto parts stores. She charges clients $3.28 per mile driven. She has determined that if she drives 2,700 miles in a month, her average operating cost is $3.08 per mile. If Bethany drives 5,400 miles in a month, her average operating cost is $2.20 per mile. Required: 1. Using the high-low method, determine Bethany's variable and fixed operating cost components. 2. Complete the contribution margin income statement for the business last month, when Bethany drove 2,970 miles. (Assume this falls within the relevant range of operations). Complete this question by entering your answers in the tabs below. Required 1 Required 2 Using the high-low method, determine Bethany's variable and fixed operating cost components. Note: Round your cost per mile answer to 2 decimal places. Variable cost per mile driven Fixed cost $ 0.01
Joyce Murphy runs a courier service in downtown Seattle. She charges clients $0.62 per mile driven. Joyce has determined that if she drives 2,450 miles in a month, her total operating cost is $725. If she drives 3,550 miles in a month, her total operating cost is $857. Required: 1. Using the high-low method, determine Joyce's variable and fixed operating cost components. 2. Complete the contribution margin income statement for Joyce's service assuming she drove 1,600 miles last month. (Assume this falls within the relevant range of operations).
Joyce Murphy runs a courier service in downtown Seattle. She charges clients $0.60 per mile driven. Joyce has determined that if she drives 2,400 miles in a month, her total operating cost is $700. If she drives 3,500 miles in a month, her total operating cost is $810. Required: 1. Using the high-low method, determine Joyce's variable and fixed operating cost components. 2. Complete the contribution margin income statement for Joyce's service assuming she drove 1,550 miles last month. (Assume this falls within the relevant range of operations). Complete this question by entering your answers in the tabs below. Required 1 Required 2 Using the high-low method, determine Joyce's variable and fixed operating cost components. (Round your cost per unit answer to 2 decimal places.) Variable Cost per Mile Driven Fixed Cost
Joyce Murphy runs a courier service in downtown Seattle. She charges clients $0.54 per mile driven. Joyce has determined that if she drives 3,200 miles in a month, her total operating cost is $829. If she drives 5,900 miles in a month, her total operating cost is $1,153. Joyce has used the high-low method to determine that her monthly cost equation is total monthly cost = $445 $0.12 per mile driven. Required: 1. Determine how many miles Joyce needs to drive to break even. 2. Calculate Joyce's degree of operating leverage if she drives 6,100 miles. 3. Suppose Joyce took a week off and her sales for the month decreased by 23 percent. Using the degree of operating leverage, calculate the effect this will have on her profit for that month
Russell Preston delivers parts for several local auto parts stores. He charges clients $0.75 per mile driven. Russell has determined that if he drives 3,480 miles in a month, his average operating cost is $0.55 per mile. If he drives 4,640 miles in a month, his average operating cost is $0.50 per mile. Russell has used the high-low method to determine that his monthly cost equation is total cost = $696 + $0.35 per mile. Required: 1. Determine how many miles Russell needs to drive to break even. 2. Assume Russell drove 2,040 miles last month. Without making any additional calculations, determine whether he earned a profit or a loss last month. 3. Determine how many miles Russell must drive to earn $1,000 in profit. 4. a. Prepare a contribution margin income statement assuming Russell drove 2,040 miles last month. b. Use the information provided in Req 4a to calculate Russell's degree of operating leverage. Complete this question by entering your answers in the tabs below. Req 1 Req 2…
Russell Preston delivers parts for several local auto parts stores. He charges clients $0.75 per mile driven. Russell has determined that if he drives 3,270 miles in a month, his average operating cost is $0.55 per mile. If he drives 4,360 miles in a month, his average operating cost is $0.50 per mile. Russell has used the high-low method to determine that his monthly cost equation is total cost = $654 + $0.35 per mile. Required: Determine how many miles Russell needs to drive to break even. Assume Russell drove 1,935 miles last month. Without making any additional calculations, determine whether he earned a profit or a loss last month. Determine how many miles Russell must drive to earn $1,000 in profit. Prepare a contribution margin income statement assuming Russell drove 1,935 miles last month. Use the information provided in Req 4a to calculate Russell’s degree of operating leverage.
Joyce Murphy runs a courier service in downtown Seattle. She charges clients $0.48 per mile driven. Joyce has determined that if she drives 3,400 miles in a month, her total operating cost is $1,004. If she drives 5,300 miles in a month, her total operating cost is $1,308. Joyce has used the high-low method to determine that her monthly cost equation is total monthly cost $460+ $0.16 per mile driven. Required: 1. Determine how many miles Joyce needs to drive to break even. 2. Calculate Joyce's degree of operating leverage if she drives 5,500 miles. 3. Suppose Joyce took a week off and her sales for the month decreased by 22 percent. Using the degree of operating leverage. calculate the effect this will have on her profit for that month. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Calculate Joyce's degree of operating leverage if she drives 5,500 miles. Note: Round your intermediate calculations to 2 decimal places and final answer…
Mountain Fun manufactures snowboards. Its cost of making 2,100 bindings is as follows: (Click the icon to view the costs.) Suppose Hemingway will sell bindings to Mountain Fun for $14 each. Mountain Fun would pay $3 per unit to transport the bindings to its manufacturing plant, where it would add its own logo at a cost of $0.70 per binding. Read the requirements. Requirement 1. Mountain Fun's accountants predict that purchasing the bindings from Hemingway will enable the company to avoid $1,800 of fixed overhead. Prepare an analysis to show whether Mountain Fun should make or buy the bindings. (Only enter the net relevant costs. For the Difference column, use a minus sign or parentheses only when the cost of outsourcing exceeds the cost of making the bindings in-house.) Variable costs: Binding costs Direct materials Direct labor Variable overhead Fixed costs Purchase price from Hemingway Transportation Logo Total differential cost of 2,100 bindings Should Mountain Fun make or buy the…
Cool Boards manufactures snowboards. Its cost of making 1,800 bindings is as follows: (Click the icon to view the costs.) Suppose Lewis will sell bindings to Cool Boards for $16 each. Cool Boards would pay $3 per unit to transport the bindings to its manufacturing plant, where it would add its own logo at a cost of $0.70 per binding. Read the requirements. Requirement 1. Cool Boards' accountants predict that purchasing the bindings from Lewis will enable the company to avoid $1,800 of fixed overhead. Prepare an analysis to show whether Cool Boards should make or buy the bindings. (Only enter the net relevant costs. For the Difference column, use a minus sign or parentheses only when the cost of outsourcing exceeds the cost of making the bindings in-house.) Variable costs: Direct materials Direct labor Variable overhead Binding costs Fixed costs Purchase price from Lewis Transportation Logo Total differential cost of 1,800 bindings Should Cool Boards make or buy the bindings? Decision:…
Tupper Inc. and Victory Inc. are two small clothing companies that are considering leasing a dyeing machine together. The companies estimated that in order to meet production, Tupper needs the machine for 950 hours and Victory needs it for 700 hours. If each company rents the machine on its own, the fee will be $85 per hour of usage. If they rent the machine together, the fee will decrease to $80 per hour of usage. Read the requirements. Requirements 1. Calculate Tupper's and Victory's respective share of fees under the stand-alone cost-allocation method. 2. Calculate Tupper's and Victory's respective share of fees using the incremental cost-allocation method assuming (a) Tupper ranked as the primary party and (b) Victory ranked as the primary party. 3. Calculate Tupper's and Victory's respective share of fees using the Shapley value method. 4. Which method would you recommend Tupper and Victory use to share the fees? - X
Tupper Inc. and Victory Inc. are two small clothing companies that are considering leasing a dyeing machine together. The companies estimated that in order to meet production, Tupper needs the machine for 950 hours and Victory needs it for 700 hours. If each company rents the machine on its own, the fee will be $85 per hour of usage. If they rent the machine together, the fee will decrease to $80 per hour of usage. Read the requirements. Requirement 1. Calculate Tupper's and Victory's respective share of fees under the stand-alone cost-allocation method. (Do not round intermediary calculations. Only round the amount you input in the cell to the nearest dollar.) Stand-alone Tupper Victory
Windows is a small company that installs windows. Its cost structure is as follows: Selling price from each window installation $500 Variable cost of each window installation $400 Annual fixed costs $150,000 Use (a) the Equation method and (b) the contribution method to calculate operating income if Bernard installs 2,000 windows. Use (a) the Equation method to calculate operating income if Bernard installs 2,000 windows. Begin by determining the formula to calculate the operating income using the equation method. Then, calculate the operating income. (Abbreviation used: FC = Fixed costs, SP = Selling price, VCU = Variable cost per unit, Q = Quantity of units sold.) ( SP × Q ) - ( VCU × Q ) - FC = Operating income ( $500 × 2,000 ) - ( $400 × 2,000 ) - $150,000 = $50,000 Next, use (b) the contribution method to calculate operating income if Bernard…

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