ZuoTi.Pro
Question

60. Smith Company is attempting to develop the cost function for repair costs. The following past data are available: Machine Hours 4,800 3,400 4,000 5,900 Repair Costs $6,385 4,585 5,285 7,085 Using the high-low method, what is the variable repair cost per machine hour? a) $0.15 b) $1.00 c) $4.00 d) $5.00 Answer: b Difficulty: Easy Learning Objective: Describe cost estimation techniques CPA: Management Accounting/Problem-Solving and Decision-Making Bloomcode: Application 61. Smith Company is attempting to develop the cost function for repair costs. The following past data are available: Machine Hours Repair Costs 4,800 3,400 ,000 ,900 $6,385 4,585 5,285 7,085 Using the high-low method, what is the ixed repair coet? a) $1,185 b) $850 c)$475 d) $565 Answer:a Difficulty: Easy Learning Objective: Describe cost estimation techniques. CPA: Management Aocounting/Problem-Solving and Decision-Making Bloomcode: Application 62. Smith Company is attempting to develop the cost function for repair costs. The following past data are available:
4,800 3,400 4,000 ,900 $6,385 4,585 5,285 7,085 Using the high-low method, what is the estimated repair cost for 4,500 machine hours? a) $5,785 b) $5,585 c) $5,685 d) $5,985 Answer: c Difficulty: Medium Learning Objective: Describe cost estimation techniques. CPA: Management Accounting/Problem-Solving and Decision-Making Bloomcode: Application 63. Milano Company has an average overhead oost per hour of $10.50 at 3,500 machine hours and at 3,000 hours it is $11.25. The company managers wish to estimate the function. What is the variable overhead cost per machine hour? overhead cost a) $1.00 b) $2.00 c) $6.00 d) $8.00 Answer: Difficulty: Easy Learning Objective: Desaribe cost estimation techniques. CPA: Management Aocounting/Problem-Solving and Decision-Making Bloomcode: Applicatiorn 64. Milano Company has an average overhead cost per hour of $10.50 at 3,500 machine hours and at 3,000 hours it is $11.25. The company managers wish to estimate the overhead cost function. What is the fixed overhead cost? a) $15,750 b) $36,750 c) $21,000 d) $18,000 Answer: Difficulty: Easy Learning Objective: Describe cost estimation techniques. CPA: Management Accounting/Problem-Solving and Decision-Making
business   accounting   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

Answer 60:

Correct answer is:

b.$1.00

Explanation:

Using high low method:

Mchine hour Repair cost High Low Difference 5,900 3,400 2,500 $7,085 $4,585 $2,500

Variable cost per machine hour = $2,500 /2,500 = $1

As such option b is correct and other options a, c and d are incorrect.

Answer 61:

Correct answer is:

a. $1,185

Explanation:

Using high low method:

Mchine hour Repair cost High Low Difference 5,900 3,400 2,500 $7,085 $4,585 $2,500

Variable cost per machine hour = $2,500 /2,500 = $1

Fixed cost = Total repair cost - variable cost = $4,585 - 3,400 * $1 = $1,185

As such option a is correct and other options b, c and d are incorrect.

Answer 62:

Correct answer is:

c. $5,685

Explanation:

As calculated in answer 61 and 62 above:

Fixed cost = $1,185

Variable cost per machine hour = $1

Hence repair cost for 4,500 machine hours =Fixed cost + Variable cost = $1,185 +4,500 * $1 = $5,685

As such option c is correct and other options a, b and d are incorrect.

Answer 63:

Correct answer is:

c. $6

Explanation:

Machine hour Overhead cost per hour Total overhead cost $36,750.00 $33,750.00 $3,000.00 3,500 3,000 500 $10.50 $11.25 Difference

Variable cost per unit = $3,000 / 500 = $6

As such option c is correct and other options a, b and d are incorrect.

Answer 64:

Correct answer is:

a. $15,750

Explanation:

Machine hour Overhead cost per hour Total overhead cost $36,750.00 $33,750.00 $3,000.00 3,500 3,000 500 $10.50 $11.25 Difference

Fixed overhead cost = Total overhead cost - variable overhead cost = $33,750 - 3,000 * $6 = $15,750

As such option a is correct and other options b, c and d are incorrect.

0 0
Add a comment
Know the answer?
Add Answer to:
60. Smith Company is attempting to develop the cost function for repair costs. The following past...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • Illinois Company is attempting to develop the cost function for repair costs. The following past data...

    Illinois Company is attempting to develop the cost function for repair costs. The following past data are available: Machine Hours Repair Costs 2.400 $6,385 1,200 2.000 $3,480 $5,285 58,980 3,400 Using the high-low method, what is the Fixed repair cost? choose the closest solution) $658 $480 $665 $1,180

  • 46. Tom and Mike are installing new flooring in their home. The house has 5 rooms...

    46. Tom and Mike are installing new flooring in their home. The house has 5 rooms of approximately equal size where the flooring will be replaced. Tom and Mike spent 3 hours removing the old flooring from the first room. If Tom and Mike are operating with an 85% learning curve, what is the estimated average time to remove the flooring from all 5 rooms? Note: In(85%)/ In(2)--0.234. a) 2.05 hours total b) 2.05 hours per room c) 2.55 hours...

  • 40. The labour cost to construct the first unit of a special piece of equipment was...

    40. The labour cost to construct the first unit of a special piece of equipment was $126,000. If labour costs are subject to a 90% learning curve, what will be the cost to build the second unit? Use the following values as needed to respond In(95%) / ln(2)s-0074 In(90%) /ln(2) =-0.152 In(8596) / ln(2) =-0.234 In(80%) / In(2) =-0.322 n(75%)/In(2) =-0.415 In(70%)/In(2) -0.515 a) $126,000 b) $113,000 c) $100,800 d) $113,400 Answer: d 41 A firm will build 8 units...

  • 76. An organization's accountant is estimating next period's total overhead costs. She performed two regression analyses,...

    76. An organization's accountant is estimating next period's total overhead costs. She performed two regression analyses, one based on direct labour hours and the other based upon machine hours. The results were: Total overhead $150,000+ $4 x direct labour hours Adjusted R-square- 0.65 Total overhead $130,000 + $5 x machine hours Adjusted R-square 0.77 For the next period, the accountant anticipates using 28,000 direct labour hours and 26,000 machine hours. Based upon this information, what is the best estimate for...

  • 76. An organization's accountant is estimating next period's total overhead costs. She performed two regression analyses,...

    76. An organization's accountant is estimating next period's total overhead costs. She performed two regression analyses, one based on direct labour hours and the other based upon machine hours. The results were: Total overhead $150,000+ $4 x direct labour hours Adjusted R-square- 0.65 Total overhead $130,000 + $5 x machine hours Adjusted R-square 0.77 For the next period, the accountant anticipates using 28,000 direct labour hours and 26,000 machine hours. Based upon this information, what is the best estimate for...

  • 5. Consider the following cost data for the cost object, number of machine setups. Each set...

    5. Consider the following cost data for the cost object, number of machine setups. Each set of costs (A, B, and C) is from a different type of manufacturing operation and represents the cost behaviour for the cost of that company's machine setups. Number of Machine Setups CostA CostB Cost $80 79 82 78 81 79 10 20 30 20 37 91 123 154 100 Cost B is best described as: a) Fixed b) Variable c) Mixed d) Discretionary Answer:ta...

  • 93. Tom and Mike are installing new flooring in their home. The house has 5 rooms...

    93. Tom and Mike are installing new flooring in their home. The house has 5 rooms of approximately equal size where the flooring will be replaced. Tom and Mike spent 3 hours removing the old flooring from the first room. The average time to remove the flooring from 2 rooms is 2.25 hours per room. Determine the learning curve percentage experienced by Tom and Mike. Below are values that may be useful in answering this question. (95%) / In(2)--0074 In(90%),...

  • 52. The cost function for Ciao Company is: TC $800+0.375 Revenue. If Ciao expects after-tax income...

    52. The cost function for Ciao Company is: TC $800+0.375 Revenue. If Ciao expects after-tax income of $600, and the tax rate is 40%, what is the firm's margin of safety? a) $3,680 b) $2,400 c) $2,880 d) $1,600 Answer: d Difficulty: Hardard Learning Objective: Assess operational risk using margin of safety and operating leverage CPA: Management Accounting 53. Terry's Donut Shop had the following activity for Total donuts sold 17,000 Total revenues $595,000 Total fixed costs 99.000 Total variable...

  • 95. Ferguson Co. incurs $568,000 in fixed costs while producing three products with the following characteristics:...

    95. Ferguson Co. incurs $568,000 in fixed costs while producing three products with the following characteristics: Sales Mix Unit Product (Units) $900 600 35% What is the breakeven point in units? a) 400 b) 240 c) 299 d) 800 Answer: d Difficulty: Medium Learning Objective: Apply CVP calculations for multiple CPA: Management Accounting 96. Ferguson Co. incurs $568,000 in fixed costs while producing three products with the following characteristics: Sales Mix Unit Product (Units) $900 600 400 45% At the...

  • 97. Three different divisions of a footwear manufacturing company are estimating oosts for their human resources...

    97. Three different divisions of a footwear manufacturing company are estimating oosts for their human resources departments. Each division has a cost structure that is different from the other divisions' and those structures are represented by the following cost behaviour patterns (A, B and C). Number of $120 118 123 124 119 $118 180 245 296 360 25 50 100 125 200 75 100 Which cost is best desoribed as fixed? a) Cost A b) Cost B c)Cost C d)Cost...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT