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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An analysis of past janitorial costs indicates that the average janitorial cost is P1.50 per machine hour at an activity level of 40,000 machine hours and P1.20 per machine hour at an activity level of 50,000 machine hours. Assuming that this activity is within the relevant range, what is the total expected janitorial cost if the activity level is 45,000 machine hours?
The Macon Company uses the high-low method to determine its cost equation. The following information was gathered for the past year:
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Machine Hours
Direct Labor Costs
Busiest month (June)
17,500
$ 229,022
Slowest month (December)
10,200
$ 155,000
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If Macon expects to use 13,500 machine hours next month, what are the estimated direct labor costs?
method to analyze cost behavior. The company observed that at 20,000 machine hours of activity, total maintenance costs averaged $10.50 per hour. When activity jumped to 24,000 machine hours, which was still within the relevant range, the average total cost per machine hour was $9.75. On the basis of this information, the company's fixed maintenance costs were:
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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- An analysis of a particular mixed cost indicates it will be an average of $0.65 per hour at an activity level of 18,000 hours and $11,700 in total at an activity level of 20,000 hours. Assuming that this activity is within the relevant range, what is the cost expected to total at an activity level of 16,000 hoursarrow_forwardA company had income of $50,000 using variable costing for a given period. Beginning and ending inventories for the period were 18,000 units and 13,000 units, respectively. If the fixed overhead application rate was $2 per unit, what was the net income, using absorption costing?arrow_forwardWilliams Company has variable costs of $0.60 per unit of product. In August, the volume of production was 24,000 units and units sold were 20,000. The total production costs incurred were $31,900. What are the fixed costs per month?arrow_forward
- Identify Cost Graphs The following cost graphs illustrate various types of cost behavior: Cost Graph One Cost Graph Two 0 Total Units Produced 0 Total Units Produced Cost Graph Three Cost Graph Four 0 Total Units Produced Total Units Producedarrow_forwardThe Macon Company uses the high-low method to determine its cost equation. The following information was gathered for the past year:   Machine Hours Direct Labor Costs Busiest month (June) 14,000 $ 265,000 Slowest month (December) 6,000 $ 129,000  What are the direct labor costs per machine hour?arrow_forwardAn analysis of a particular cost incurred in a factory revealed that the cost is averages ₱0.40 per machine-hour at an activity level of 20,000 machine hours and increases to an average of ₱0.50 per machine hour at an activity level of 16,000 machine hours. Assuming that this activity is within the relevant range, what is the total expected cost if the activity level is 17,300 machine hours?arrow_forward
- The company produces 24,000 units each month and 23,600 units are sold in a month. What is the unit product cost under variable costing?arrow_forwardThe normal production capacity of a company is 10,000 units per month. On this basis, the fixed costs are assigned, which, in unit terms, amount to:General and administrative expenses $25.00Selling expenses $5.00Unit variable costs are fully proportional to production and sales, and amount to:Direct Labor $18.00Materials $14.50Manufacturing overhead $8.00 The price of the product in the market is $90 and the commissions to the sellers correspond to 5% of the sales. The company is studying the possibility of closing for a time that could reach 2 years, due to a period of depression that is estimated to affect the industry in that period, a fact that would reduce its activity levels to 20% of its normal capacity. If it closes, fixed charges could be reduced by 30%, and if it continues to operate, the reduction would only reach 15%. What would be the differential savings of opting for the best alternative?arrow_forwardThe estimated unit costs for a company to produce and sell a product at a level of 14,000 units per month are as follows: Estimated Unit Cost Cost Item Direct material Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling expenses Fixed selling expenses What are the estimated prime costs per unit? $ 39 29 24 5 3 4arrow_forward
- Quest manufacturing incurs the following costs per unit: labor $100/unit, materials $50/unit, and rent $100,000/month. If the Quest produces 500,000 units a month, calculate the following: a. Total variable costs b. Total fixed costs c. Total costsarrow_forwardThomas Train has collected the following information over the last six months. Month Units produced Total costs March 10,000 $25,600 April 12,000 26,200 May 18,000 28,800 June 13,000 26,450 July 12,000 26,000 August 15,000 26,500 Using the high-low method, what is the variable cost per unit?arrow_forwardAt an activity level of 4,500 machine-hours in a month, JOB Corporation's total variable maintenance and repair cost is P394,830 and its total fixed maintenance and repair cost is P105,570. What would be the total maintenance and repair cost, both fixed and variable, at an activity level of 4,600 units in a month? Assume that this level of activity is within the relevant range.P505,960P509,174P500,400P511,520arrow_forward
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