Managerial Accounting: Creating Value in a Dynamic Business Environment
12th Edition
ISBN: 9781260417074
Author: HILTON, Ronald
Publisher: MCGRAW-HILL HIGHER EDUCATION
expand_more
expand_more
format_list_bulleted
Concept explainers
Question
Chapter 2, Problem 30E
To determine
Calculate the missing amounts in the table.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
Mighty Muffler, Incorporated, operates an automobile service facility that specializes in replacing mufflers on compact cars. The
following table shows the costs incurred during a month when 500 mufflers were replaced.
Note: Round "cost per muffler" to 2 decimal places.
Required:
Fill in the missing amounts.
Total costs
Fixed costs
Variable costs
Total costs
Cost per muffler replacement
Fixed cost
Variable cost
Total cost per muffler replacement
400
Muffler Replacements
$
$
500
46,500
26,500
73,000
600
Mighty Muffler, Inc., operates an automobile service facility that specializes in replacing mufflers on compact cars. The following table
shows the costs incurred during a month when 600 mufflers were replaced.
Required:
Fill in the missing amounts.
Muffler Replacements
500
600
700
Total costs:
Fixed costs
2$
42,000
Variable costs
30,000
Total costs
$
72,000
Cost per muffler replacement:
Fixed cost
Variable cost
Total cost per muffler replacement
Ethan Manufacturing Incorporated produces floor mats for automobiles. The owner, Joseph Ethan, has asked you to assist in estimating maintenance costs. Together, you and Joseph determine that the single best cost driver for maintenance costs is machine hours. These data are from the previous fiscal year for maintenance costs and machine hours:
Month
Maintenance Costs
Machine Hours
1
$ 2,780
1,870
2
2,940
1,950
3
3,090
2,030
4
3,200
2,050
5
3,280
2,080
6
3,250
2,060
7
3,190
2,040
8
3,030
2,020
9
2,800
1,880
10
2,400
1,280
11
2,410
1,480
12
2,630
1,770
Required:
1. What is the cost equation for maintenance costs using the high-low method?
2. Calculate the mean absolute percentage error (MAPE) for the cost equation you developed in requirement 1.
Chapter 2 Solutions
Managerial Accounting: Creating Value in a Dynamic Business Environment
Ch. 2 - Distinguish between product costs and period...Ch. 2 - Why are product costs also called inventoriable...Ch. 2 - What is the most important difference between a...Ch. 2 - List several product costs incurred in the...Ch. 2 - Prob. 5RQCh. 2 - Why is the cost of idle time treated as...Ch. 2 - Explain why an overtime premium is included in...Ch. 2 - Prob. 8RQCh. 2 - Give examples to illustrate how the city of Tampa...Ch. 2 - Distinguish between fixed costs and variable...
Ch. 2 - How does the fixed cost per unit change as the...Ch. 2 - Prob. 12RQCh. 2 - Prob. 13RQCh. 2 - Would each of the following characteristics be a...Ch. 2 - List three direct costs of the food and beverage...Ch. 2 - List three costs that are likely to be...Ch. 2 - Which of the following costs are likely to be...Ch. 2 - Distinguish between out-of-pocket costs and...Ch. 2 - Define the terms sunk cost and differential cost.Ch. 2 - Distinguish between marginal and average costs.Ch. 2 - Prob. 21RQCh. 2 - Two years ago the manager of a large department...Ch. 2 - Indicate whether each of the following costs is a...Ch. 2 - For each case below, find the missing amount.Ch. 2 - A foundry employee worked a normal 40-hour shift,...Ch. 2 - A loom operator in a textiles factory earns 16 per...Ch. 2 - Consider the following costs that were incurred...Ch. 2 - Alexandria Aluminum Company, a manufacturer of...Ch. 2 - Prob. 30ECh. 2 - A hotel pays the phone company 100 per month plus...Ch. 2 - Prob. 32ECh. 2 - Orbital Communications, Inc. manufactures...Ch. 2 - The state Department of Education owns a computer...Ch. 2 - Prob. 35ECh. 2 - List the costs that would likely be included in...Ch. 2 - Consider the following cost items: 1. Salaries of...Ch. 2 - The following selected information was extracted...Ch. 2 - Prob. 39PCh. 2 - Mason Corporation began operations at the...Ch. 2 - Determine the missing amounts in each of the...Ch. 2 - The following cost data for the year just ended...Ch. 2 - The following data refer to San Fernando Fashions...Ch. 2 - Highlander Cutlery manufactures kitchen knives....Ch. 2 - Cape Cod Shirt Shop manufactures T-shirts and...Ch. 2 - Heartland Airways operates commuter flights in...Ch. 2 - San Diego Sheet Metal, Inc. incurs a variable cost...Ch. 2 - Hightide Upholstery Company manufactures a special...Ch. 2 - For each of the following costs, indicate whether...Ch. 2 - Indicate for each of the following costs whether...Ch. 2 - Water Technology, Inc. incurred the following...Ch. 2 - The following terms are used to describe various...Ch. 2 - Several costs incurred by Bayview Hotel and...Ch. 2 - Refer to Exhibit 23, and answer the following...Ch. 2 - Roberta Coy makes custom mooring covers for boats....Ch. 2 - The Department of Natural Resources is responsible...Ch. 2 - Prob. 57PCh. 2 - Prob. 58PCh. 2 - CompTech, Inc. manufactures printers for use with...Ch. 2 - You just started a summer internship with the...
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
- Muffler Incorporated produces floor mats for cars and trucks. The owner, Kenneth Muffler, asked you to assist him in estimating his maintenance costs. Together, Mr. Muffler and you determined that the single best cost driver for maintenance costs was machine hours. Below are data from the previous fiscal year for maintenance expense and machine hours: Month 1 2 3 456789 10 11 12 Maintenance Expense $ 3,280 3,470 3,650 3,780 3,780 4,000 Multiple Choice O $1.44. Using the high-low method, unit variable cost is calculated to be: $1.61. $1.66. 3,770 3,580 3,300 2,960 2,860 3,040 $1.50. Machine Hours 2,280 2,380 2,480 2,510 2,360 2,530 2,500 2,470 2,290 2,160 1,770 2,150arrow_forwardFelinas Inc. produces floor mats for cars and trucks. The owner, Kenneth Felinas, asked you to assist him in estimating his maintenance costs. Together, Mr. Felinas and you determined that the single best cost driver for maintenance costs was machine hours. Below are data from the previous fiscal year for maintenance expense and machine hours: Maintenance Machine Month Expense Hours 1 $ 3,120 2,200 3,310 2,300 3 3,490 2,400 4 3,620 2,430 3,620 2,280 3,680 2,440 7 3,610 2,420 8 3,420 2,390 3,140 2,210 10 2,880 2,080 11 2,780 1,690 12 2,940 2,070 Using the high-low method, total monthly fixed cost is calculated to be: LOarrow_forwardMuffler Incorporated produces floor mats for cars and trucks. The owner, Kenneth Muffler, asked you to assist him in estimating his maintenance costs. Together, Mr. Muffler and you determined that the single best cost driver for maintenance costs was machine hours. Below are data from the previous fiscal year for maintenance expense and machine hours: Maintenance Expense Month Machine Hours 1 $ 3,360 2,320 234 2 3,550 2,420 3,730 2,520 3,860 2,550 5 3,860 2,400 6 4,160 2,560 7 3,850 2,540 8 3,660 2,510 9 3,380 2,330 10 3,000 2,200 11 2,900 1,710 12 3,120 2,190 Using the high-low method, total monthly fixed cost is calculated to be (Round final answer to full dollar amount with no decimal places): Multiple Choicearrow_forward
- 3B Corporation makes different types of hubcaps for cars. The company accumulates volumes of metal edges as scrap. At least once a month, the scrap metal is sold to a local manufacturer for further processing. This month's scrap sales on account total P14,000.00. The company is using actual cost system. 10: Required: Prepare the appropriate journal entry to record the sale of the scrap for each of the following alternatives: 1 Scrap sale is viewed as additional revenue 2. Scrap sale is viewed as reduction of cost of goods sold 3. When scrap materials are traceable as indirect materials 4. When scrap materials are traceable as direct materialsarrow_forwardSaved Mighty Muffler, Inc., operates an automobile service facility that specializes in replacing mufflers on compact cars. The following table shows the costs incurred during a month when 500 mufflers were replaced. (Round "cost per muffler" to 2 decimal places.) Required: Fill in the missing amounts. Muffler Replacements 400 500 600 Total costs: Fixed costs 2$ 44,000 Variable costs 24,000 Total costs 2$ 68,000 Cost per muffler replacement: Fixed cost Variable cost Total cost per muffler replacement Next > 8 of 9 < Prev 出arrow_forwardFollowing is a list of various costs incurred in producing replacement automobile parts. With respect to the production and sale of these auto parts, classify each cost as variable, fixed, or mixed. 1. Cost of labor for hourly workers 2. Factory cleaning costs, $6,000 per month 3. Hourly wages of machine operators 4. Computer chip (purchased from a vendor) 5. Electricity costs, $0.20 per kilowatt-hour 6. Metal 7. Salary of plant manager 8. Property taxes, $165,000 per year on factory building and equipment 9. Plastic 10. Oil used in manufacturing equipment 11. Rent on warehouse, $10,000 per month plus $25 per square foot of storage used 12. Property insurance premiums, $3,600 per month plus $0.01 for each dollar of property over $1,200,000 13. Straight-line depreciation on the production equipment 14. Pension cost, $1.00 per employee hour on the job 15. Packagingarrow_forward
- Following is a list of various costs incurred in producing replacement automobile parts. With respect to the production and sale of these auto parts, classify each cost as variable, fixed, or mixed. 1. Cost of labor for hourly workers 2. Factory cleaning costs, $6,000 per month 3. Hourly wages of machine operators 4. Computer chip (purchased from a vendor) 5. Electricity costs, $0.20 per kilowatt-hour 6. Metal 7. Salary of plant manager 8. Property taxes, $165,000 per year on factory building and equipment 9. Plastic 10. Oil used in manufacturing equipment 11. Rent on warehouse, $10,000 per month plus $25 per square foot of storage used 12. Property insurance premiums, $3,600 per month plus $0.01 for each dollar of property over $1,200,000 13. Straight-line depreciation on the production equipment 14. Pension cost, $1.00 per employee hour on the job 15. Packaging…arrow_forwardJoha, an accountant for Jones, Inc., has decided to estimate the fixed and variable components associated with the company's repair activity. The following data for the past few months has been collected: Repair Hours Total Repair Costs 20 $ 1,000 25 1,250 30 1,400 40 1,550 Required: Estimate the fixed and variable components for the repair costs using the high-low method. Using the cost formula, predict the total cost of repair if 10 hours are used.arrow_forwardHarold Manufacturing produces denim clothing. This year, it produced 5,280 denim jackets at a manufacturing cost of $41.00 each. These jackets were damaged in the warehouse during storage. Management investigated the matter and identified three alternatives for these jackets. 1. Jackets can be sold to a secondhand clothing shop for $7.00 each. 2. Jackets can be disassembled at a cost of $32,800 and sold to a recycler for $11.00 each. 3. Jackets can be reworked and turned into good jackets. However, with the damage, management estimates it will be able to assemble the good parts of the 5,280 jackets into only 3,050 jackets. The remaining pieces of fabric will be discarded. The cost of reworking the jackets will be $101,400, but the jackets can then be sold for their regular price of $41.00 each. Required: 1. Calculate the incremental income. Incremental revenue Incremental costs Incremental income Alternative 1 Sell to a second- hand shop Alternative 2 Disassemble and sell to a recycler…arrow_forward
- Andover Company makes weather balloons. The company controller wanted to calculate the fixed and variable costs associated with the maintenance costs incurred by the factory. Data for the past six months were collected. Maintenance Machine Month cost hours January $10,120 526 February 9,560 389 March 9,712 412 April 10,460 569 May 10,226 541 June 9,686 399 Required: A. Using the high-low method, calculate the fixed cost of maintenance and the variable rate per machine hour. Round the total fixed cost to the nearest dollar, and round the variable cost per machine hour to two decimal places. B. Using the high-low method, construct the cost formula for the total maintenance cost. C. Calculate the budgeted cost for maintenance assuming that 485 hours are worked next month. Round the answer to the nearest dollar.arrow_forwardBased from the given data, answer the following questions. Show your computations.G Toy Shop manufactures children's plush toys and incurred the following during the process: (The following are within one month of production with 980 total manufactured plush toys).P 150,000 for materials such as cloth, pile textiles and stuffing materialsP 10,000 for threads and accessoriesP 12,000 building rentalP 45,000 salaries of 5 factory workersP 10,000 security guard salaryP 5,500 depreciation of machines and equipment 4) What is the amount of Direct labor? a. P55,000 b. P10,000 c. P45,000 d. P0.005) What is the amount of Overhead Cost? a. P20,000b. P17,500c. P25,500d. P5,500 6) What is the amount of the Product Cost? a. P242,500 b. P245,000 c. P232,500 d. 240,500arrow_forwardBased from the given data, answer the following questions. Show your computations.G Toy Shop manufactures children's plush toys and incurred the following during the process: (The following are within one month of production with 980 total manufactured plush toys).P 150,000 for materials such as cloth, pile textiles and stuffing materialsP 10,000 for threads and accessories P 12,000 building rentalP 45,000 salaries of 5 factory workersP 10,000 security guard salaryP 5,500 depreciation of machines and equipment1) What is the amount of Direct Materials? a. P160,000 b. P150,000 c. P170,000 d. P10,000 2) What is the amount of the Unit Cost? a. P245 b. P237 c. P250 d. P238 3) What is the amount of indirect materials? a. P160,000 b. P10,000 c. P 0.00 d. P150,000 4) What is the amount of Direct labor? a. P55,000 b. P10,000 c. P45,000 d. P0.005) What is the amount of Overhead Cost? a. P20,000b.…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
- Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSONIntermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill EducationFinancial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education