08-18 at 11.37.45 AM_LI.jpg& Edit & CreateQUESTION 2Steve Richardson, management accountant at Jupiter Ltd, is examining the behaviour of quarterly maintenance costs for budgeting purposes. Steve collects the following data onmachine-hours worked and maintenance costs for the past eight quarters:Save AnswerQuarterMachine-hoursMaintenance costs1,200$2,15012.7501,5003.1,1002,000141,5002,700159001,4501,4902,800162,25071,3001,9501,000Required:Close Windowa. Estimate the cost function for the quarterly data using the high-low method,Save All AnswersClick Save and Submit to save and submit. Click Save All Answers to save all answers.DELL11:46 AM30°C AQI 23 A A 90)8/18/2021pe here to search hatsApp Image 2021-08-18 at 11.38.00 AM.jpeg7501,5001,1002,000141,5002,7009001,450161,4902,800171,3002,2501,0001,950Required:a. Estimate the cost function for the quarterly data using the high-low method. *b. Steve anticipates that Jupiter Ltd will operate machines for 1,300 hours in quarter 9, Calculate the predicted maintenance costs in quarter 9 using the cost functionestimated in requirement (a).*Please indicate which question you are answering for each.For the toolhar press AL T+F10 (POor ALT+EN+F10.(Mac)Save All AnswersClose WindowClick Save and Submit to save and submit. Click Save All Answers to save all answers.DELL11:46 AM30°C AQI 23O G G 4)8/18/2021O Type here to search

The high low level method is used to separate the fixed and variable cost from mixed cost.

QUESTION 2 Steve Richardson, management accountant at Jupiter Ltd, is examining the behaviour of quarterly maintenance costs for budgeting purposes. Steve collects the following data on machine-hours worked and maintenance costs for the past eight quarters: Save Answer Quarter Machine-hours Maintenance costs 1. 1,200 $2,150 12 750 1,500 3 1,100 2,000 14 1,500 2,700 900 1,450 15 1,490 2,800 16 2,250 17 1,300 1,000 1,950 18 Required: for she quarterly data using the high-loyw method,

QUESTION 2 Steve Richardson, management accountant at Jupiter Ltd, is examining the behaviour of quarterly maintenance costs for budgeting purposes. Steve collects the following data on machine-hours worked and maintenance costs for the past eight quarters: Save Answer Quarter Machine-hours Maintenance costs 1. 1,200 $2,150 12 750 1,500 3 1,100 2,000 14 1,500 2,700 900 1,450 15 1,490 2,800 16 2,250 17 1,300 1,000 1,950 18 Required: for she quarterly data using the high-loyw method,

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter7: Allocating Costs Of Support Departments And Joint Products

Section: Chapter Questions

Problem 30E: A company uses charging rates to allocate service department costs to the using departments. The...

See similar textbooks

Similar questions

The information provided below was taken from the records of Chotoo Projects for the financialyear ended 31 May 2020.Extract of statement of comprehensive income for the year ended 31 May 2020RRevenue 480 000Direct costs 240 000Rent income 150 000Advertising 4 800Salaries and wages 90 000Rates and taxes 1 200Other operating expenses 80 000Additional information1. Revenue is calculated as direct cost plus 25%.2. Revenue is divided equally each month. Revenue is expected to increase by 18% for thefinancial year ending 31 May 2021.POSTGRADUATE DIPLOMA IN PROJECT MANAGEMENT – ACADEMIC AND ASSESSMENT CALENDARREGENT BUSINESS SCHOOL (RBS) January 2021 173. Fifty percent (50%) of the revenue is for cash and the balance is on credit. Debtorsnormally pay their accounts as follows:• 40% in the month of the invoice, and these debtors are entitled toa 5% discount;• 55% one month after the invoice;The balance is usually written off as bad debts.4. Purchases for June and July are expected to be 30…
Given below the 2PM’s Hairstyling information for the month ended June 30: a) Revenue and cost formula Budgeted client-visits q Revenue RM180q Wages and salaries RM65,000 + RM37q Hairstyling supplies RM1.50q Client gratuities RM4.10q Electricity RM1500 + RM0.10q Rent RM28,500 Liability insurance RM2,800 Employee health insurance RM21,300 Miscellaneous RM1,200 + RM0.20q b) The budgeted client-visits were 1,000. c) Income statement for the month ended June 30: 2PM’s Hairstyling Income Statement For the month ended June 30 Actual client-visits 1100 RM Revenue 194,200 Expenses: Wages and salaries 106,900 Hairstyling supplies 1,620 Client gratuities 6,870 Electricity 1,550 Rent 28,500 Employee health insurance 22,600…
The information provided below was taken from the records of Chotoo Projects for the financial year ended 31 May 2020. Extract of statement of comprehensive income for the year ended 31 May 2020 R Revenue 480 000 Direct costs 240 000 Rent income 150 000 Advertising 4 800 Salaries and wages 90 000 Rates and taxes 1 200 Other operating expenses 80 000 21 Additional information 1. Revenue is calculated as direct cost plus 25%. 2. Revenue is divided equally each month. Revenue is expected to increase by 18% for the financial year ending 31 May 2021. 3. Fifty percent (50%) of the revenue is for cash and the balance is on credit. Debtors normally pay their accounts as follows:  40% in the month of the invoice, and these debtors are entitled to a 5% discount;  55% one month after the invoice; The balance is usually written off as bad debts. 4. Purchases for June and July are expected to be 30 000 per month. All purchases are for cash. 5. In terms of the lease agreement rent is received…
Dallus wants to examine the behaviour of maintenance costs for budgeting purpose. The following data on machine hours worked and maintenance costs for the past year are collected: Month Machine Hours Maintenance Cost January 18,000 February 15,000 March 12,750 21,000 April May June 11,880 14,500 July 19,000 August 14,880 September 10,000 October 13,360 November 16,600 December 18,800 $20,600 18,900 15,100 22,010 13,200 19,500 25,000 19,874 12,000 15,500 19,800 13,500 Required: a. Use the high-low method to estimate the variable cost per machine hour and the fixed cost per month. b. Plot and comment on the estimated cost function. C. Develop a formula to express the cost behaviour of ABC's maintenance costs. d. According to the budget, the machine is expected to work 200,000 hours next year. How much is the budgeted maintenance costs?
MCQS: 1) Evergreen Corporation manufactures circuit boards and is in the process of preparing next year's budget. The pro forma income statement for the current year is presented below. Sales $ 3,500,000 Cost of sales: Direct Material $ 500,000 Direct labor 250,000 Variable Overhead 275,000 Fixed Overhead 600,000 1,625,000 Gross Profit $ 1,875,000 Selling and General & Admin. Exp. Variable 750,000 Fixed 250,000 1,000,000 Operating Income $ 875,000 For the coming year, the management of Evergreen Corporation anticipates a 5 percent decrease in sales, a 10 percent increase in all variable costs, and a $45,000 increase in fixed costs. The operating profit for next year would be: A $477,500. B $492,500. C $831,250. D $552,500. 2) Neelon Corporation has two divisions: Southern Division and Northern Division. The following data are for the most recent…
The following extract is taken from the maintenance cost budget: Maintenance hours 8,300 8,520 Maintenance cost £211,600 £216,440 The budget cost allowance for maintenance costs for the latest period, when 8,427 maintenance hours were worked, is $_____
Required Information [The following information applies to the questions displayed below] Adger Corporation is a service company that measures its output based on the number of customers served. The company provided the following fixed and variable cost estimates that it uses for budgeting purposes and the actual results for May as shown below. Revenue Employee salaries and wages Travel expenses Other expenses Fixed Element per Month Amount of other expenses $50,000 $36.000 $ 35,000 Variable Element per Customer Served $5,000 $1,100 $ 600 Actual Total for May $ 160,000 $ 88,000 When preparing its planning budget the company estimated that it would serve 30 customers per month; however, during May the company actually served 35 customers. 4. What amount of other expenses would be included in Aager's flexible budget for May? $ 19,000 $ 34,500 28
The controller of the Stump Company is preparing the budget for 2021 and needs to estimate a cost function for delivery costs. Information regarding delivery costs incurred in the prior 2 months are: LOADING... (Click the icon to view the information.) Requirements 1. Estimate the cost function for delivery. 2. Can the constant in the cost function be used as an estimate of fixed delivery cost per month? Explain. Requirement 1. Estimate the cost function for delivery. Delivery costs = + ( × ) Delivery costs = + ( × ) Requirement 2. Can the constant in the cost function be used as an estimate of fixed delivery cost per month? Explain. The cost function in requirement 1 is an estimate of how costs behave ▼ outside of within the relevant range, not at cost levels ▼ outside within the relevant range. If there are no months with zero miles driven represented in the delivery cost…
D Coronado Industries provides financial consulting and sells its own line of financial planners and budgeting products. The company has collected the following data for the next year's budgeted activity for a lead consultant and the supplies clerk. W S Consultants' wages Benefits Related overhead Clerk's wages Benefits Related overhead Profit margin per hour Profit margin on materials Total estimated consulting hours Total estimated material costs O $30.48. O $52.00. O $32.00. O $16.00. Save for Later # 3 E The labor rate per hour for this consultant is D с $ t R $90000 50000 LL 20000 $18000 3000 21000 $20 5000 $174000 15 % % G Search or type URL T MacBook Pro G ^ 6 Y & 7 H U * CO 8 Attempts: 0 of 1 used J + - - 9 K Submit Answer ) O 3 L P
As a newly hired management accountant, you have been asked to prepare a profit plan for the company for which you work. As part of this task, you've been asked to do some what-if analyses. Following is the budgeted Information regarding the coming year: Selling price per unit Variable cost per unit Fixed costs (per year) Required: $ 100.00 60.00 1,113,040 1. What is the breakeven volume, in units and dollars, for the coming year? 2. Assume that the goal of the company is to earn a pretax (operating) profit of $316,000 for the coming year. How many units would the company have to sell to achieve this goal? 3. Assume that of the $60 variable cost per unit the labor-cost component is $27. Current negotiations with the employees of the company indicate some uncertainty regarding the labor cost component of the variable cost figure presented above. What is the effect on the breakeven point in units if selling price and fixed costs are as planned, but the labor cost for the coming year is…
Wayne Mueller, financial analyst at CELL Corporation, is examining the behav- ior of quarterly utility costs for budgeting purposes. Mueller collects the following data on machine-hours worked and utility costs for the past 8 quarters: Utility Costs $215,000 Quarter Machine-Hours 120,000 150,000 200,000 270,000 170,000 250,000 225,000 195,000 2 75,000 110,000 150,000 90,000 140,000 130,000 3 4 5 100,000 1. Estimate the cost function for the quarterly data using the high-low method. 2. Plot and comment on the estimated cost function. 3. Mueller anticipates that CELL will operate machines for 125,000 hours in quarter 9. Calculate the pre- dicted utility costs in quarter 9 using the cost function estimated in requirement 1.
Relevant data from Picta Company’s operating budgets are presented below. The company’s financial year ends on 30 June. Quarter 1Quarter 2Sales$248,470$251,539Direct material purchases120,295128,832Direct labor76,55374,289Manufacturing overhead26,00024,400Selling and administration expenses33,50033,500Depreciation included in selling and administration expenses 2,000 2,500 Collection from customers230,524220,116Cash payments for purchases114,345118,346 Additional data:Equipment was sold in July for $8,000 and $4,500 in November. Dividends of $5,500 were paid in August. The beginning cash balance was $80,395 and a required minimum cash balance per quarter is $60,000. The company has a 15% open line of credit for $70 000 with their bank. Required: a) Use this information to prepare a cash budget for the first two quarters of the year. bi) Briefly comment on Picta Company’s expected cashflow position in the first two quarters of the year.