Question 3 High-Low Method; Predicting Cost Colby Limited is a manufacturing company whose total factory overhead costs fluctuate somewhat from year to year, according to the number of machine-hours worked in its production facility. These costs at high and low levels of activity over recent years are given below: Level of Activity Machine-hours 50,000 Total factory overhead costs $ 14,250,000 $ Indirect materials (variable) $ Rent (fixed) Low Maintenance (mixed) Total factory overhead costs $ The factory overhead costs above consist of indirect materials, rent, and maintenance. The company has analyzed these costs at the 50,000 machine-hours level of activity as follows: High 5,000,000 6,000,000 3,250,000 14,250,000 75,000 17,625,000 For planning purposes, the company wants to break down the maintenance cost into its variable and fixed cost elements.

Question 3 High-Low Method; Predicting Cost Colby Limited is a manufacturing company whose total factory overhead costs fluctuate somewhat from year to year, according to the number of machine-hours worked in its production facility. These costs at high and low levels of activity over recent years are given below: Level of Activity Machine-hours 50,000 Total factory overhead costs $ 14,250,000 $ Indirect materials (variable) $ Rent (fixed) Low Maintenance (mixed) Total factory overhead costs $ The factory overhead costs above consist of indirect materials, rent, and maintenance. The company has analyzed these costs at the 50,000 machine-hours level of activity as follows: High 5,000,000 6,000,000 3,250,000 14,250,000 75,000 17,625,000 For planning purposes, the company wants to break down the maintenance cost into its variable and fixed cost elements.

Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter10: Cost Analysis For Management Decision Making

Section: Chapter Questions

Problem 9P: Grand Canyon Manufacturing Inc. produces and sells a product with a price of 100 per unit. The...

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Grand Canyon Manufacturing Inc. produces and sells a product with a price of 100 per unit. The following cost data have been prepared for its estimated upper and lower limits of activity: Overhead: Selling and administrative expenses: Required: 1. Classify each cost element as either variable, fixed, or semi-variable. (Hint: Recall that variable expenses must go up in direct proportion to changes in the volume of activity.) 2. Calculate the break-even point in units and dollars. (Hint: First use the high-low method illustrated in Chapter 4 to separate costs into their fixed and variable components.) 3. Prepare a break-even chart. 4. Prepare a contribution income statement, similar in format to the statement appearing on page 540, assuming sales of 5,000 units. 5. Recompute the break-even point in units, assuming that variable costs increase by 20% and fixed costs are reduced by 50,000.
Question 4 Achimota Ltd produces a single product and has the following financial information: Selling Price Cost per unit: Direct Materials Direct Labour Variable Overheads GH¢ 50 15 14 4 Fixed manufacturing overheads are GH¢40,000 per month, production volume is 10,000 units per month and sales is 9,200 units. You are required to: a) Calculate the cost per unit under: i. Absorption costing ii. Marginal costing b) Prepare the income statement of ABC Ltd under: i. Absorption costing technique ii. Marginal costing technique c) Reconcile the profits obtained under (bi) and (bii) d) Explain the reasons for the difference in profits in (c) above.
Marginal Costing and Absorption Costing Question 2 The following information is being provided by ABC Company: Direct material cost per unit OMR 20 Direct labour cost per unit OMR 8 Variable manufacturing overhead per unit OMR 2 Total fixed manufacturing overhead per year OMR 150,000 Variable selling and administration expenses OMR 2.5 per unit sold Fixed selling and administration expenses OMR 75,000 Number of units produced per year 25,000 Units Number of units sold per year 21,000 Units Opening stock of finished goods Selling price OMR 50 You are required to: A. Calculate the profit under marginal costing and absorption costing
High-Low Method The manufacturing costs of Ackerman Industries for the first three months of the year follow: Total Costs Units Produced January $219,590 2,710 units February 168,480 1,680 March 262,080 4,080 Using the high-low method, determine (a) the variable cost per unit and (b) the total fixed cost. Round all answers to the nearest whole dollar. a. Variable cost per unit $ b. Total fixed cost
Additional Information: Şales revenue per unit will be decreased by BD 1.200 fils for sales more than 9,000 units. a. b. Direct material cost is a variables cost and other production overheads are fixed cost. C. Direct labour consists of machine operatives' wages and the total wages behave as a step cost: Output Up to 7,500 units Over 7,501 and up to 11,000 units Over 11,001 and up to 15,000 units Machine running costs are a semi-variable cost. There is a fixed charge of BD 5,000 plus BD 1.200 fils per unit. Total Direct Labour cost BD 4,850 BD 8,563 BD 10,484 d. Required: the budgeted other production overhead under the output of 11300 units is:
High-Low Method The manufacturing costs of Ackerman Industries for the first three months of the year follow Total Costs Units Produced $253,550 2,540 units January February 1,400 187,200 March 3,400 291,200 Using the high-low method, determine (a) the variable cost per unit and (b) the total fixed cost. Round all answers to the nearest whole dollar. a. Variable cost per unit b. Total fixed cost
Additional Information Sales revenue per unit will be decreased by BD 1.200 fils for sales more than 9,000 units. a. b. Direct material cost is a variables cost and other production overheads are fixed cost. C. Direct labour consists of machine operatives wages and the total wages behave as a step cost: Total Direct Labour cost Output Up to 7.500 units Over 7,501 and up to 11.000 units Over 11.001 and up to 15,000 units Machine running costs are a semi-variable cost. There is a fixed charge of BD 5,000 plus BD 4,850 BD 8,563 BD 10,484 d. BD 1.200 fils per unit. Required the budgeted direct material under the output of 11300 unit is:
Identify cost graphs The following cost graphs illustrate various types of cost behaviour: a. Total direct material cost b. Electricity costs of $1,000 per month plus 50.10 per Kilowatt-hour c. Per unit cost of straight-line depreciation on factory equipment d. Salary of quality control superbisor, 520,000 per month e. Per-unit direct labor cost
Additional Information: a. Sales revenue per unit will be decreased by BD 1.200 fils for sales more than 9,000 units. b. Direct material cost is a variables cost and other production overheads are fixed cost. C. Direct labour consists of machine operatives' wages and the total wages behave as a step cost: Output Up to 7,500 units Over 7,501 and up to 11,000 units Over 11,001 and up to 15,000 units Machine running costs are a semi-variable cost. There is a fixed charge of BD 5,000 plus BD 1.200 fils per unit. Total Direct Labour cost BD 4,850 BD 8,563 BD 10,484 d. Required. the budgeted sales revenue under the output of 11300 unit is:
Subject: Cost management & accountng MCQ's Bryans Corporation has provided the following data for its two most recent years of operation: Selling price per unit $ 53 Manufacturing costs: Variable manufacturing cost per unit produced: Direct materials $ 13 Direct labor $ 6 Variable manufacturing overhead $ 5 Fixed manufacturing overhead per year $ 63,000 Selling and administrative expenses: Variable selling and administrative expense per unit sold $ 4 Fixed selling and administrative expense per year $ 71,000 Year 1 Year 2 Units in beginning inventory 0 3,000 Units produced 9,000 7,000 Units sold 6,000 7,000 Units in ending inventory 3,000 3,0000 The unit product cost under variable costing in Year 1 is closest to: $31.00 $28.00 $24.00 $35.00
Please Solve this MCQs Pedregon Corporation has provided the following information: Cost per Unit Cost per Period Direct materials $ 7.35 Direct labor $ 4.30 Variable manufacturing overhead $ 1.60 Fixed manufacturing overhead $ 26,000 Sales commissions $ 0.80 Variable administrative expense $ 0.90 Fixed selling and administrative expense $ 6000 If the selling price is $22.10 per unit, the contribution margin per unit sold is closest to: $4.85 $3.15 $10.45 $7.15
Listen Selected information about Buehler Corporation's operations at high and at low levels of activity follow: Number of units produced Total manufacturing costs Direct material cost per unit Direct labour cost per unit O $11.05. $32.00. $35.00. Using the high-low method, what is the total variable cost per unit of product? $21.00. Activity Level Low 25,000 $575,000 G $5 $6 High 30.000 $680,000 $5 $6