Survey Of Accounting
5th Edition
ISBN: 9781259631122
Author: Edmonds, Thomas P.
Publisher: Mcgraw-hill Education,
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Chapter 11, Problem 26P
a)
To determine
Prepare income statement of University K and University D.
b)
To determine
Prepare income statement of University D
c)
To determine
Prepare income statement of University D
d)
To determine
The reason for profit in part b) and loss in part c)
e)
To determine
Prepare income statement of University K and University D.
f)
To determine
Justify the given statement is false
g)
To determine
Justify the given statement is false
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Problem 2-19A (Algo) Context-sensitive nature of cost behavior classifications LO 2-1
Vernon Bank's start-up division establishes new branch banks. Each branch opens with three tellers. Total teller cost per branch is
$96,000 per year. The three tellers combined can process up to 85,000 customer transactions per year. If a branch does not attain a
volume of at least 55,000 transactions during its first year of operations, it is closed. If the demand for services exceeds 85,00O
transactions, an additional teller is hired and the branch is transferred from the start-up division to regular operations.
Required
a. What is the relevant range of activity for new branch banks?
b. Determine the amount of teller cost in total and the average teller cost per transaction for a branch that processes 55,000, 65,000,
75,000, or 85,000 transactions. In this case (the activity base is the number of transactions for a specific branch), is the teller cost a
fixed or a variable cost?
c. Determine the…
Problem 2-19A (Algo) Context-sensitive nature of cost behavior classifications LO 2-1
Vernon Bank's start-up division establishes new branch banks. Each branch opens with three tellers. Total teller cost per branch is
$96,000 per year. The three tellers combined can process up to 85,000 customer transactions per year. If a branch does not attain a
volume of at least 55,000 transactions during its first year of operations, it is closed. If the demand for services exceeds 85,00O
transactions, an additional teller is hired and the branch is transferred from the start-up division to regular operations.
Required
a. What is the relevant range of activity for new branch banks?
b. Determine the amount of teller cost in total and the average teller cost per transaction for a branch that processes 55,000, 65,000,
75,000, or 85,000 transactions. In this case (the activity base is the number of transactions for a specific branch), is the teller cost a
fixed or a variable cost?
c. Determine the…
Question 2
Capital University, a midsized university in a capital city recently received an offer from BrainTrust Teaching
Services to teach all of the first year accounting courses at the university. There are currently 10 sections of
1st year accounting taught at Capital University. Cost per section are as follows:
Description
Cost
Professors
Classroom/building
Teaching Assistants
$20,000
$4,000
$2,000
Notes
Half of these costs can be avoided by laying off staff
This space can not be used for other purposes
All costs can be avoided
As well, it is estimated that fixed administrative costs are $1,000 per section.
BrainTrust has proposed that they can teach all of the sections for a total cost of $105,000
Should Capital accept this special offer? (include both qualitative and quantitative analysis)
Chapter 11 Solutions
Survey Of Accounting
Ch. 11 - 1.Define fixed cost and variable cost and give an...Ch. 11 - Prob. 2QCh. 11 - 3.Define the term operating leverage and explain...Ch. 11 - Prob. 4QCh. 11 - Prob. 5QCh. 11 - 6.If volume is increasing, would a company benefit...Ch. 11 - Explain the risk and rewards to a company that...Ch. 11 - 9.Are companies with predominately fixed cost...Ch. 11 - 10.How is the relevant range of activity related...Ch. 11 - Which cost structure has the greater risk?...
Ch. 11 - 14.The president of Bright Corporation tells you...Ch. 11 - Prob. 12QCh. 11 - Prob. 13QCh. 11 - Prob. 14QCh. 11 - Prob. 15QCh. 11 - Prob. 16QCh. 11 - Prob. 17QCh. 11 - Prob. 1ECh. 11 - Prob. 2ECh. 11 - Prob. 3ECh. 11 - Exercise 2-4A Determining total variable cost The...Ch. 11 - Prob. 5ECh. 11 - Prob. 6ECh. 11 - Prob. 7ECh. 11 - Prob. 8ECh. 11 - Prob. 9ECh. 11 - Prob. 10ECh. 11 - Prob. 11ECh. 11 - Prob. 12ECh. 11 - Prepare an income statement using the contribution...Ch. 11 - Prob. 14ECh. 11 - Prob. 15ECh. 11 - Prob. 16ECh. 11 - Prob. 17ECh. 11 - Prob. 18ECh. 11 - Prob. 19ECh. 11 - Prob. 20ECh. 11 - Prob. 21PCh. 11 - Prob. 22PCh. 11 - Problem 2-19A Context-sensitive nature of cost...Ch. 11 - Prob. 24PCh. 11 - Prob. 25PCh. 11 - Prob. 26PCh. 11 - Prob. 27PCh. 11 - Prob. 28PCh. 11 - Prob. 29PCh. 11 - Prob. 1ATCCh. 11 - Prob. 2ATCCh. 11 - Prob. 3ATCCh. 11 - Prob. 4ATCCh. 11 - Prob. 5ATC
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