Question

высол Аавьсeo Aәсер Левьсо ласер Аавьс арьсар Аав маа graph Question 3 (This question has 3 items, (a), (b), and (c)) (4+ 3+ 6 = 13 marks) The organisation you work for uses a contribution format income statement for planning purposes. The organisation has analysed its expenses and obtained the following information: Cost of goods sold $25 per unit sold Advertising expense per quarter S210,000 Sales commission 4% of sales Selling and administrative expense per quarter $90,000 Depreciation expense per quarter $70,000 Insurance expense per quarter $10,000 ? Shipping expense Management would like a cost formula derived for shipping expense so that a budgeted contribution format income statement can be prepared for the next quarter Period Units Sold Shipping expense Quarter 1 30,000 $396,000 Quarter 2 32 000 $420,000 Quarter 3 36.000 $453,000 Quarter 4 33,000 $430,000

please give solution within 30 minutes

Answer 1

D E F G H K M N O Р Q R 10 SA 11 Highest Level of Activity = 36,000 Units Lowest Level of Activity = 30,000 Units 12 13 14 High Low Method = 453,000 - 396,000/ 36,000 - 30,000 16 17 High Low Method =57,000 / 6,000 = $ 9.5 19 20 1 Variable cost = $ 9.5 per unit 22 23 2 Fixed Cost per Month = Total Costs - Variable Costs Fixed Cost per Month = 453,000 - 36000 * 9.5 25 27 28 Fixed Cost per Month = 453,000 - 342,000 30 31 Fixed Cost per Quarter = $ 111,000 33 Sheet 414 Sheet 415 Sheet 416 Sheet 417 Sheet 28 ( Sheet22 Sheet 412 (2) 1309 Ready

File Home Insert Page Layout Formulas Sign in Data Review View Help Tell me what you want to do Calibri V11 % Cut LG Copy Format Painter V A 4 Share General Paste AutoSum A O BI U ab Wrap Text Merge & Center - BA- % Insert Delete Format Clipboard Font Conditional Format as Cell Formatting Table Styles Styles Clear - Alignment Number Sort Find a Filter Select Editing Cells H6 х ✓ fx A B C D E F 1 G H K 2 (B) 3 4 Particulars Period Units Sold Quarter 1 30,000 Quarter 2 32,000 Quarter 3 36,000 Quarter 4 33,000 5 Based on High Low Method Variable Cost Per Unit = C* 9.5 Fixed Costs 2,85,000 1,11,000 3,04,000 1,11,000 3,42,000 1,11,000 3,13,500 1,11,000 Total Cost 3,96,000 4,15,000 4,53,000 4,24,500 Actuals Actual Cost 3,96,000 4,20,000 4,53,000 4,30,000 6 7 8 9 10 11 12 13 14 There are difference in the results drawn out by the supervision is true but the differences are not very significant which indicates that the fixed costs are same which means that there might be a little variation in the variable cost of that respective period for the actuals due to which there is some minor differences overall the variable rate per unit and fixed costs basis are realistic based on High Low Method 15 16 17 18 Sheet 414 Sheet 415 Sheet 416 Sheet 417 Sheet 20 () shap 2 Sheet 412 (2) Ready 130%