Managerial Accounting: Tools for Business Decision Making
7th Edition
ISBN: 9781118334331
Author: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
Publisher: WILEY
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Question
Chapter 5, Problem 5.3BYP
(a)
To determine
Variable Cost: The cost which is not fixed is called as variable cost. This cost is directly proportional to the level of output produced, it increase with increase in output and vice versa.
Fixed Cost: Fixed cost doesn’t change when level of output increase or decrease, like rent and salary.
To explain: Whether the sweetener and packaging are variable or a fixed cost, impact on contribution, implications for profitability.
(b)
To determine
To explain: Whether the marketing expenditure is fixed or variable or mixed cost.
(c)
To determine
To explain: The measures C company used to represent the activity index.
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The Coca-Cola Company hardly needs an introduction. A line taken from the cover of a recent annual report says it all: If you measured time in servings of Coca-Cola, “a billion Coca-Cola’s ago was yesterday morning.” On average, every U.S. citizen drinks 363 8-ounce servings of Coca-Cola products each year. Coca-Cola’s primary line of business is the making and selling of syrup to bottlers. These bottlers sell the finished bottles and cans of Coca-Cola to the consumer.
In the annual report to Coca-Cola, the information shown below was provided.
The Coca-Cola Company
Management Discussion
Our gross margin declined to 61 percent this year from 62 percent in the prior year; primarily due to costs for materials such as sweeteners and packaging.
The increase [in selling expenses] in the last two years were primarily due to higher marketing expenditures in support of our Company’s volume growth.
We measure our sales volume in two ways: (1) gallon shipments of concentrates and…
.
1,6 billion gallons are sold every year, in over one hundred and sixty countries.
The drink was invented by Dr.Jonh Pemberton in Atlanta as a health drink on 8 May 1886, but it was given the name Coca - Cola by his parther, Frank Robison, because it was originally made from the coca (cocaine) plant.
In the first year, only nine drinks a day were sold.
The business was bought by a man called Asa Candler in 1888, and the first factory was opened in Dallas, Texas, in 1895. Coca - Cola is still made there. Billions of bottles and cans have been produced since 1895, but the recipe is still kept secret!
Diet Coke has been made since 1982, and over the years many clever advertisements have been used to sell the product. It is certain that Coca - Cola will be drunk far into the twenty - first century.
1/
Dr. John Pemberton gave the drink the name Coca-Cola . T or F?
2 /
The first factory was opened in Atlanta . T or F ?
3 /
Coca-Cola is not a popular drink . true or F ?
4 /…
PepsiCo sells its soft drinks in approximately 400,000 retail establishments, such as supermarkets, discount stores, and convenience stores. Sales representatives call on each retail account weekly, which means each account is called on by a sales rep 52 times per year. The average length of a sales call is 75 minutes (or 1.25 hours). An average salesperson works 2,000 hours per year (50 weeks per year * 40 hours per week), but each spends 10 hours a week on non-selling activities, such as administrative tasks and travel. How many salespeople does PepsiCo need?
Chapter 5 Solutions
Managerial Accounting: Tools for Business Decision Making
Ch. 5 - (a) What is cost behavior analysis? (b) Why is...Ch. 5 - (a) Scott Winter asks your help in understanding...Ch. 5 - Contrast the effects of changes in the activity...Ch. 5 - J. P. Alexander claims that the relevant range...Ch. 5 - The relevant range is indispensable in cost...Ch. 5 - Prob. 6QCh. 5 - How should mixed costs be classified in CVP...Ch. 5 - At the high and low levels of activity during the...Ch. 5 - "Cost-volume-profit (CVP) analysis is based...Ch. 5 - Faye Dunn defines contribution margin as the...
Ch. 5 - Prob. 11QCh. 5 - Prob. 12QCh. 5 - Prob. 13QCh. 5 - Prob. 14QCh. 5 - Define the term margin of safety. If Revere...Ch. 5 - Prob. 16QCh. 5 - Prob. 17QCh. 5 - Monthly production costs in Dilts Company for two...Ch. 5 - Prob. 5.2BECh. 5 - For Wesland Company, a mixed cost is 15,000 plus...Ch. 5 - Bruno Company accumulates the following data...Ch. 5 - Markowis Corp. has collected the following data...Ch. 5 - Determine the missing amounts.Ch. 5 - Russell Inc. had sales of 2,20O,0O0 for the first...Ch. 5 - Rice Company has a unit selling price of 520,...Ch. 5 - Presto Corp. had total variable costs of 180,000....Ch. 5 - For Flynn Company, variable costs are 70% of...Ch. 5 - Prob. 5.11BECh. 5 - Prob. 5.12BECh. 5 - Amanda Company reports the following total costs...Ch. 5 - Westerville Company accumulates the following data...Ch. 5 - Prob. 5.3DICh. 5 - Snow Cap Company has a unit selling price of 250,...Ch. 5 - Presto Company makes radios that sell for 30 each....Ch. 5 - Bonita Company manufactures a single product....Ch. 5 - Shingle Enterprises is considering manufacturing a...Ch. 5 - The controller of Norton Industries has collected...Ch. 5 - Family Furniture Corporation incurred the...Ch. 5 - The controller of Hall industries has collected...Ch. 5 - PCB Corporation manufactures a single product....Ch. 5 - Marty Moser wants Moser Company to use CVP...Ch. 5 - All That Blooms provides environmentally friendly...Ch. 5 - The Palmer Acres Inn is trying to determine its...Ch. 5 - In the month of March, Style Salon services 560...Ch. 5 - Spencer Kars provides shuttle service between four...Ch. 5 - In 2016. Manhoff Company had a break-even point of...Ch. 5 - Billings Company has the following information...Ch. 5 - Naylor Company had 210,000 of net income in 2016...Ch. 5 - Yams Company reports the following operating...Ch. 5 - Glacial Company estimates that variable costs will...Ch. 5 - Felde Bucket Co., a manufacturer of rain barrels,...Ch. 5 - Vin Diesel owns the Fredonia Barber Shop. He...Ch. 5 - Jorge Company bottles and distributes B-Lite, a...Ch. 5 - Tanek Corp.'s sales slumped badly in 2017. For the...Ch. 5 - Mary Willis is the advertising manager for Bargain...Ch. 5 - Prob. 5.5APCh. 5 - Kaiser Industries carries no inventories. Its...Ch. 5 - Bill Johnson, sales manager, and Diane Buswell,...Ch. 5 - Creative Ideas Company has decided to introduce a...Ch. 5 - The condensed income statement for the Peri and...Ch. 5 - Prob. 5.3BYPCh. 5 - Prob. 5.4BYPCh. 5 - Your roommate asks for your help on the following...Ch. 5 - Prob. 5.6BYPCh. 5 - Cost-volume-profit analysis can also be used in...
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