Exercise 12-11 (Algo) Estimating costs based on behavior patterns LO 3 Larry estimates that the costs of insurance, license, and depreciation to operate his car total $450 per month and that the gas, oil, and maintenance costs are 39 cents per mile. Larry also estimates that, on average, he drives his car 2,000 miles per month. Required: a. How much cost would Larry expect to incur during April if he drove the car 1,519 miles? (Round your answer to 2 decimal places.) b. Would it be meaningful for Larry to calculate an estimated average cost per mile for a typical 2,000-mile month? multiple choice Yes no

Exercise 12-11 (Algo) Estimating costs based on behavior patterns LO 3 Larry estimates that the costs of insurance, license, and depreciation to operate his car total $450 per month and that the gas, oil, and maintenance costs are 39 cents per mile. Larry also estimates that, on average, he drives his car 2,000 miles per month. Required: a. How much cost would Larry expect to incur during April if he drove the car 1,519 miles? (Round your answer to 2 decimal places.) b. Would it be meaningful for Larry to calculate an estimated average cost per mile for a typical 2,000-mile month? multiple choice Yes no

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter2: Basic Cost Management Concepts

Section: Chapter Questions

Problem 5CE: Jean and Tom Perritz own and manage Happy Home Helpers, Inc. (HHH), a house-cleaning service. Each...

See similar textbooks

Exercise 12-11 (Algo) Estimating costs based on behavior patterns LO 3

Larry estimates that the costs of insurance, license, and depreciation to operate his car total $450 per month and that the gas, oil, and maintenance costs are 39 cents per mile. Larry also estimates that, on average, he drives his car 2,000 miles per month.

Required:

a. How much cost would Larry expect to incur during April if he drove the car 1,519 miles? (Round your answer to 2 decimal places.)

b. Would it be meaningful for Larry to calculate an estimated average cost per mile for a typical 2,000-mile month?

multiple choice

Yes

no

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step 3

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Exercise 12-11 (Algo) Estimating costs based on behavior patterns LO 3 Larry estimates that the costs of insurance, license, and depreciation to operate his car total $450 per month and that the gas, oil, and maintenance costs are 39 cents per mile. Larry also estimates that, on average, he drives his car 2,000 miles per month. Required: a. How much cost would Larry expect to incur during April if he drove the car 1,519 miles? (Round your answer to 2 decimal places.) Answer is complete but not entirely correct. Total cost 1,070.49 b. Would it be meaningful for Larry to calculate an estimated average cost per mile for a typical 2,000-mile month? Yes O No
QUESTION 7 You plan on starting a lawn mowing business by investing $700 of your own money and purchasing $500 of equipment. You plan to work 330 hours per month and charge your customers $18 per hour. Your anticipated costs include: Advertising Gas $33.00 per month $1.20 per hour Depreciation $25.00 per month Assistant's Wages $7.00 per hour Miscellaneous Expenses $950.00 per month Calculate your budgeted contribution margin per hour on the contribution margin income statement.
QUESTION 9 You plan on starting a lawn mowing business by investing $700 of your own money and purchase $500 of equipment. You plan to work 260 hours per month and charge your customers $22 per hour. Your anticipated costs include: Depreciation Advertising Gas Assistant's Wages Miscellaneous Expenses $25.00 per month $26.00 per month $1.20 per hour $8.00 per hour $20.00 per month Calculate your Variable cost per hour on the budgeted contribution margin income statement. 1
Q:A contractor buys cement in 25-pound bags. The contractor uses 1,440 bags a year. Ordering cost is $15 per order. Annual carrying cost is $75 per bag. 1-Compute the total cost of ordering and carrying cement. 2-If holding costs were to increase by $9 per year, how much would that affect the minimum total annual cost? Increase by $.
esc You plan on starting a lawn mowing business by investing $700 of your own money and purchasing $500 of equipment. You plan to work 80 hours in your first month and 370 hours in your second month of business. You charge your customers $24 per hour. Your anticipated costs include: Advertising Gas Depreciation Assistant's Wages Miscellaneous Expenses You plan on collecting 90% of your sales in the month you mow the lawn and the remainder in the following month. Calculate the accounts receivable balance at the end of your second month of business. Click Save and Submit to save and submit. Click Save All Answers to save all answers. 1 Q A 2 W $8 per month $1.40 per hour $25 per month $8.00 per hour $40 per month S # 3 E D $ 4 R 67 dº % 5 LL MacBook Pro T < 6 G & Y 7 H * 00 8 U J o
Question 4 Auto Tires, Inc. sells tires to service stations for an average of $145 each. The variable costs of each tire is $85 and monthly fixed manufacturing costs total $45,000. Other monthly fixed costs of the company total $15,000. Note: No need to enter comma between number Required: 1. What is the break-even level in tires? 2. What is the margin of safety, assuming sales total $190,000? 3. What is the break-even level in tires, assuming variable costs increase by 20 percent and selling price increase by 17 per unit ? 4. What is the break-even level in tires, assuming the selling price goes up by 20 percent, fixed manufacturing costs decline by 10 percent and other fixed costs decline by $1500and variable cost decrease by 1 per unit ?
QUESTION 1 Bock Ltd. makes 200 wooden kitchen chairs every month and sells them for GHe50 each. Fixed month overheads are GHe3.00 and thestandard cost of one chair is as follows: GHe Materials 15 Direct labour 8 Variable overheads 7 Required: 1.Calculate for one month 2. The variable cost of one chair b. the breaker en point 3. The profit if 200 chairs are sold 4. The number of chairs sold to give profit of GHe4,000
Question 15 of 16 Elise and her friend Eloi developed an online car repair training course and sell it for $69 per course. The contribution margin per course is $26 and to break even they need to have a total revenue of $12,420 per annum. a. What is the break-even volume? Round up to the next whole number b. What is the fixed costs per annum? Round to the nearest cent c. What is the total revenue if they sell 3,020 courses this year?
Question 3 Assume that HASF furniture Inc., as described, currently purchases the chair cushions for its lawn set from an outside vendor for $30 per set. Modern Furniture’s chief operations officer wants an analysis of the comparative costs of manufacturing these cushions to determine whether bringing the manufacturing in-house would save the firm money. Additional information shows that if Modern furniture’s were to manufacture the cushions, the materials cost would be $16 and the labor cost would be $10 per set and that it would have to purchase cutting and sewing equipment, which would add $25,000 to annual fixed costs. NOTE: No need to enter comma between numbers Required Computation for 10,000 units What amount should have been inccrued if company produce 10,000 units What amount should have been inccrued if company purhcase 10,000 units from outside What amount company save if company make 10,000 cushions
Jean and Tom Perritz own and manage Happy Home Helpers, Inc. (HHH), a house-cleaning service. Each cleaning (cleaning one house one time) takes a team of three house cleaners about 1.5 hours. On average, HHH completes about 15,000 cleanings per year. The following total costs are associated with the total cleanings: Required: 1. Calculate the prime cost per cleaning. 2. Calculate the conversion cost per cleaning. 3. Calculate the total variable cost per cleaning. 4. Calculate the total service cost per cleaning. 5. What if rent on the office that Jean and Tom use to run HHH increased by 1,500? Explain the impact on the following: a. Prime cost per cleaning b. Conversion cost per cleaning c. Total variable cost per cleaning d. Total service cost per cleaning
The expected costs for the Maintenance Department of Stazler, Inc., for the coming year include: Fixed costs (salaries, tools): 64,900 per year Variable costs (supplies): 1.35 per maintenance hour Estimated usage by: Actual usage by: Required: 1. Calculate a single charging rate for the Maintenance Department. 2. Use this rate to assign the costs of the Maintenance Department to the user departments based on actual usage. Calculate the total amount charged for maintenance for the year. 3. What if the Assembly Department used 4,000 maintenance hours in the year? How much would have been charged out to the three departments?
Question 4 You are contemplating leaving your full-time employment to concentrate your ability on the marketing of a new low-energy portable heater. You have spoken to a group of manufacturers of similar product, and you have produced the following data based upon the production of 1200 heaters in the six months to December 31, 2021. R R Unit selling price 160 Less: Direct materials 50 Direct labour 30 Fixed Overheads: Admin 4.00 Rent 7.50 Rates…