Homework Answers
"Fixed cost per unit are an unreliable amount."
Fixed cost, as the name indicates, doesn't change with the change in level of activity (i.e., output). Therefore, fixed cost per unit will be low if number of units are high and fixed cost per unit will be high if number of units are low.
As fixed cost doesn't tend to change, its impact on making decisions about profitabilty is not significant as fixed cost is irrelevant for decision making. It is not an incremental cost unlike variable cost.
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Cost Behaviour Analysis Exercise --Section 5 only Due: September 25 at 11:55 p.m. "Fixed cost per...
Cost Behaviour Module Module Problem Due: September 23 at 11:55 p.m. ABC Firm reports the following...
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Exercise 3-6 Chapter 3 Cost Behaviour Analysis and Use r EXERCISE L Account Analysis Method (LOBI...
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25 7 8. Royal Products' manufacturing costs per unit are: Variable Costs $50 Fixed Costs A...
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Check Exercise 5-13 Changes in Selling Price, Sales Volume, Variable Cost per Unit, and Total Fixed...
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Exercise 11-22 Special Order; Opportunity Cost [LO 11-2) Grant Industries, a manufacturer of electronic parts, has...
Exercise 11-22 Special Order; Opportunity Cost [LO 11-2) Grant Industries, a manufacturer of electronic parts, has recently received an Invitation to bid on a special order for 15,000 units of one of its most popular products. Grant currently manufactures 30,000 units of this product In its Loveland, Ohio, plant. The plant is operating at 50% capacity. There will be no marketing costs on the special order. The sales manager of Grant wants to set the bid at $8 because she...
Problem 11-18 Relevant Cost Analysis in a variety of Situations (LO11-2, LO11-3, LO11-4] Andretti Company has...
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Problem 5-25 Changes in Fixed and Variable Costs; Break-Even and Target Profit Analysis [LO5-4, LO5-5, LO5-6]...
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Problem 11-18 Relevant Cost Analysis in a variety of Situations (LO11-2, LO11-3, LO11-4] Andretti Company has...
Problem 11-18 Relevant Cost Analysis in a variety of Situations (LO11-2, LO11-3, LO11-4] Andretti Company has a single product called a Dak. The company normally produces and sells 122,000 Daks each year at a selling price of $48 per unit. The company's unit costs at this level of activity are given below: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling expenses Fixed selling expenses Total cost per unit $ 8.50 10.00 3.30 5.00 $610,000 total) 1.70...
roblem 11-18 Relevant Cost Analysis in a Variety of Situations [LO11-2, LO11-3, LO11-4] Andretti Company has...
roblem 11-18 Relevant Cost Analysis in a Variety of Situations [LO11-2, LO11-3, LO11-4] Andretti Company has a single product called a Dak. The company normally produces and sells 121,000 Daks each year at a selling price of $40 per unit. The company’s unit costs at this level of activity are given below: Direct materials $ 6.50 Direct labor 11.00 Variable manufacturing overhead 2.20 Fixed manufacturing overhead 5.00 ($605,000 total) Variable selling expenses 3.70 Fixed selling expenses 4.50 ($544,500 total) Total...
Cost Behaviour Module Module Problem Due: September 23 at 11:55 p.m. ABC Firm reports the following for the first three months of 2020: January I February March Units Produced Units Sold 6,000 3,500 8,000 8,800 4,500 4,000 COGS Direct Materials Used Depreciation Shipping Cost Rent Utilities in Factory $37.700 19,500 7,500 4,900 3,125 16,500 $69,500 26,000 7,500 12,320 3,125 19,100 $40,700 14,625 7,500 5,600 3,125 14,550 1. For each cost, determine whether it is fixed, variable or mixed. You will...
Exercise 3-6
Chapter 3 Cost Behaviour Analysis and Use r EXERCISE L Account Analysis Method (LOBI med manufactures des for industrial Most of their c aree ed costs. However, an a n alysis shows the following i s an Account Analysis Production supervision SOS fired 205 fired Sales staff wages ....... 705 fixed Quality control inspections 90 fixed "The 30% variable portion relates to sales commissions based on total sales **SOS of manufactured units are inspected each year 2016 Total...
25 7 8. Royal Products' manufacturing costs per unit are: Variable Costs $50 Fixed Costs A special order for 2,000 units has been received from a foreign company at a special unit price of $55. The normal unit price is $80. If the order is accepted, unit variable costs will increase by $2 for additional freight costs. What is the incremental profit (loss) if the order is accepted? A) $10,000. B) $(46,000). C) $6,000. D) $(40,000). 11. Opportunity cost must...
Check Exercise 5-13 Changes in Selling Price, Sales Volume, Variable Cost per Unit, and Total Fixed Costs (LO5-1, LO5.4) Miller Company's contribution format income statement for the most recent month is shown below: Per Unit $10.00 Sales (30,000 units) Variable expenses Contribution margin Fixed expenses Net operating income Total $ 380,000 210,000 90,000 47,eee $ 43,000 $ 3.ee Required: (Consider each case independently 1. What is the revised net operating income if unit sales increase by 13%? 2. What is...
Exercise 11-22 Special Order; Opportunity Cost [LO 11-2) Grant Industries, a manufacturer of electronic parts, has recently received an Invitation to bid on a special order for 15,000 units of one of its most popular products. Grant currently manufactures 30,000 units of this product In its Loveland, Ohio, plant. The plant is operating at 50% capacity. There will be no marketing costs on the special order. The sales manager of Grant wants to set the bid at $8 because she...
Problem 11-18 Relevant Cost Analysis in a variety of Situations (LO11-2, LO11-3, LO11-4] Andretti Company has a single product called a Dak. The company normally produces and sells 120,000 Daks each year at a selling price of $48 per unit. The company's unit costs at this level of activity are given below: 2.70 Direct materials $ 8.50 Direct labor 11.00 Variable manufacturing overhead Fixed manufacturing 60 ($ 720,000 overhead total) Variable selling expenses 4.70 Fixed selling expenses total) Total cost...
Problem 11-18 Relevant Cost Analysis in a variety of Situations (LO11-2, LO11-3, LO11-4] Andretti Company has a single product called a Dak. The company normally produces and sells 122,000 Daks each year at a selling price of $48 per unit. The company's unit costs at this level of activity are given below: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling expenses Fixed selling expenses Total cost per unit $ 8.50 10.00 3.30 5.00 $610,000 total) 1.70...
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