FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Determine the fixed cost given the following information:
Lowest level of activity – 200 units at a total cost of $900
Highest level of activity – 800 units at a total cost of $2100
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- A. APPLY THE CONCEPTS: Determine the mixed costs Costs that display characteristics of both fixed and variable costs simultaneously are called "mixed costs." The rental agreement on a piece of machinery stipulates an annual fee of $6,000 plus $2 for each hour of use. To illustrate, assume the manager wants to know what mixed costs will be at 7,000 hours of operation. Fixed Cost + (Variable Cost per Unit x Number of Units) = Mixed Cost $________________ + $_____ x 7,000 hours) = $___________ For this scenario, calculate the mixed costs at different levels across the relevant range, then graph them. Hours of Operation Mixed Cost 0 hours $________________ 4,000 $________________ 9,000 $________________ 12,000 $________________ 15,000 $________________ B. Based on the data from the table completed above, select the graph that correctly represents the mixed cost data. (selections in screenshot)arrow_forwardComplete the table below for contribution margin per unit, total contribution margin, and contribution margin ratio: E (Click the icon to view the table.) Compute the missing information, starting with scenario A, then for scenarios B and C. (Enter the contribution margin ratio to nearest percent, X%.) A Number of units 1,510 units Sale price per unit $ 1,600 Variable costs per unit 1, 120 Calculate: Contribution margin per unit Total contribution margin Contribution margin ratio Data Table A Number of units 1,510 units 14,390 units 2,450 units Sale price per unit 1,600 $ 4.400 5,000 Variable costs per unit 1,120 880 3,750 Calculate: Contribution margin per unit Total contribution margin Contribution margin ratio Print Done Enter any number in the edit fields and then click Check Answer. parts remaining Clear All Final Checkarrow_forwardIf fixed costs are $1,334,000, the unit selling price is $240, and the unit variable costs are $109, what is the amount of sales required to realize an operating income of $221,000? a.5,558 units b.2,028 units c.12,239 units d.11,870 unitsarrow_forward
- Using the variable cost method, the markup per unit for 30,000 units (rounded to the nearest dollar) using the following data is Line Item Description Amount Variable cost per unit $15 Total fixed costs $90,000 Desired profit $150,000 A. $15 B. $8 C. $10arrow_forwardAn analysis of a particular mixed cost indicates it will be an average of $0.65 per hour at an activity level of 18,000 hours and $11,700 in total at an activity level of 20,000 hours. Assuming that this activity is within the relevant range, what is the cost expected to total at an activity level of 16,000 hoursarrow_forwardThe following information relates to Everstream Ltd: Variable manufacturing cost 500 Applied fixed manufacturing cost 160 Variable selling and administrative cost 130 Allocated fixed selling and administrative cost ? To achieve the target price of $1,035 per unit, the mark-up percentage based on total unit cost is 15%. Required: Calculate the allocated fixed selling and administrative cost per unit. Develop a cost-plus pricing formula that will result in the target price for each of the following bases: Variable manufacturing cost Absorption manufacturing cost Total variable costarrow_forward
- Which of the following is a fixed cost? Multiple Choice A cost that is $40.00 per unit when production is 100,000, and $80.00 per unit when production is 160,000. A cost that is $40.00 per unit when production is 100,000, and $40.00 per unit when production is 160,000. A cost that is $80.00 per unit when production is 100,000, and $80.00 per unit when production is 160,000. A cost that is $40.00 per unit when production is 100,000, and $25.00 per unit when production is 160,000.arrow_forwardGiven the following data: Contribution margin per unit: Product A $11Product B $12 Machine hours required for one unit: Product A 2 hoursProduct B 2.5 hours A. Compute the contribution margin per unit of limited resource for each product.arrow_forwardRequired: 1. Using the five most expensive activities, calculate the overhead cost assigned to each prod-uct. Assume that the costs of the other activities are assigned in proportion to the cost of the five activities.2. Calculate the error relative to the fully specified ABC product cost and comment on the outcome.3. What if activities 1, 2, 5, and 8 each had a cost of $650,000 and the remaining activities hada cost of $50,000? Calculate the cost assigned to Wafer A by a fully specified ABC systemand then by an approximately relevant ABC approach. Comment on the implications forthe approximately relevant approach.arrow_forward
- answer in text form please both a and b (without image)arrow_forwardCarla Vista Company has a unit selling price of $384, unit variable costs of $254, and fixed costs of $201,500. Compute the break-even point in units using (a) the mathematical equation and (b) unit contribution margin. (a) Break-even point (b) Break-even point units unitsarrow_forwardSteel company's average cost per unit is $1.425 at the 16,000 unit level of activity and #1.38 at the 20,000 unit level of activity Assume that all of the activity levels mentioned in this problem are within the relevent range. Pridict the total expected costs at the 18,000 unit level of activityarrow_forward
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