Cost Accounting (15th Edition)
15th Edition
ISBN: 9780133428704
Author: Charles T. Horngren, Srikant M. Datar, Madhav V. Rajan
Publisher: PEARSON
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Textbook Question
Chapter 2, Problem 2.19E
Classification of costs, merchandising sector. Band Box Entertainment (BBE) operates a large store in Atlanta, Georgia. The store has both a movie (DVD) section and a music (CD) section. BBE reports revenues for the movie section separately from the music section.
Classify each cost item (A–H) as follows:
- a. Direct or indirect (D or I) costs of the total number of DVDs sold.
- b. Variable or fixed (V or F) costs of how the total costs of the movie section change as the total number of DVDs sold changes. (If in doubt, select on the basis of whether the total costs will change substantially if there is a large change in the total number of DVDs sold.)
You will have two answers (D or I; V or F) for each of the following items:
| Cost Item | D or I V or F |
| A. Annual retainer paid to a video distributor | |
| B. Cost of store manager’s salary | |
| C. Costs of DVDs purchased for sale to customers | |
| D. Subscription to DVD Trends magazine | |
| E. Leasing of computer software used for financial budgeting at the BBE store | |
| F. Cost of popcorn provided free to all customers of the BBE store | |
| G. Cost of cleaning the store every night after closing | |
| H. Freight-in costs of DVDs purchased by BBE |
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Classification of costs, merchandising sector. Band Box Entertainment (BBE) operates a large store in Atlanta, Georgia. The store has both a movie (DVD) section and a music (CD) section. BBE reports revenues for the movie section separately from the music section. Classify each cost item (A–H) as follows:
Direct or indirect (D or I) costs of the total number of DVDs sold.
Variable or fixed (V or F) costs of how the total costs of the movie section change as the total number of DVDs sold changes. (If in doubt, select on the basis of whether the total costs will change substantially if there is a large change in the total number of DVDs sold.)
You will have two answers (D or I; V or F) for each of the following items: Cost Item D or I V or F
Annual retainer paid to a video distributor
Cost of store manager’s salary
Costs of DVDs purchased for sale to customers
Subscription to DVD Trends magazine
Leasing of computer software used for financial budgeting at the BBE store
Cost of…
Essential College Supplies
(ECS)
is a store on the campus on a large Midwestern university. The store has both an apparel section (t-shirts with the school logo) and a convenience section.
ECS
reports revenues for the apparel section separately from the convenience section.
Requirement
Classify each cost item
(A-H)
as follows:
a.
Direct or indirect (D or I) costs of the total number of t-shirts sold.
b.
Variable or fixed (V or F) costs of how the total costs of the apparel section change as the total number of t-shirts sold changes. (If in doubt, select on the basis of whether the total costs will change substantially if there is a large change in the total number of t-shirts sold.)
Requirement a. Classify each cost item
(A-H)
as direct or indirect (D or I) costs of the total number of t-shirts sold.
Cost Item
D or I
A.
Annual fee for licensing the school logo
B.
Cost of store manager's salary
C.…
How is the average unit cost (of sold products) calculated at the end of a
period, for a retailer?
Select one:
O a. Total Operating Expenses/Total Number of units Sold
O b. Cost of Goods Manufactured/Total units Produced
O c. Total Cost of Goods Sold /Total Number of units Sold
O d. Total Service Costs/Total Number of Services Provided
Chapter 2 Solutions
Cost Accounting (15th Edition)
Ch. 2 - Define cost object and give three examples.Ch. 2 - Define direct costs and indirect costs.Ch. 2 - Prob. 2.3QCh. 2 - Name three factors that will affect the...Ch. 2 - Define variable cost and fixed cost. Give an...Ch. 2 - What is a cost driver? Give one example.Ch. 2 - What is the relevant range? What role does the...Ch. 2 - Explain why unit costs must often be interpreted...Ch. 2 - Prob. 2.9QCh. 2 - What are three different types of inventory that...
Ch. 2 - Distinguish between inventoriable costs and period...Ch. 2 - Define the following: direct material costs,...Ch. 2 - Describe the overtime-premium and idle-time...Ch. 2 - Define product cost. Describe three different...Ch. 2 - What are three common features of cost accounting...Ch. 2 - Prob. 2.16ECh. 2 - Prob. 2.17ECh. 2 - Classification of costs, service sector. Market...Ch. 2 - Classification of costs, merchandising sector....Ch. 2 - Prob. 2.20ECh. 2 - Variable costs, fixed costs, total costs. Bridget...Ch. 2 - Prob. 2.22ECh. 2 - Prob. 2.23ECh. 2 - Prob. 2.24ECh. 2 - Cost drivers and functions. The representative...Ch. 2 - Prob. 2.26ECh. 2 - Total and unit cost, decision making. Gayles...Ch. 2 - Prob. 2.28ECh. 2 - Prob. 2.29PCh. 2 - Prob. 2.30PCh. 2 - Prob. 2.31PCh. 2 - Prob. 2.32PCh. 2 - Prob. 2.33PCh. 2 - Prob. 2.34PCh. 2 - Prob. 2.35PCh. 2 - Prob. 2.36PCh. 2 - Prob. 2.37PCh. 2 - Prob. 2.38PCh. 2 - Prob. 2.39PCh. 2 - Prob. 2.40PCh. 2 - Prob. 2.41PCh. 2 - Prob. 2.42P
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