Action Trainers provides a personalized training program that is popular with many companies. The munberof programs offered over the last five months, and the costs of offering these programn are as follosJanFebMarAprilMayPromams Offered554560Costs Incuned$15,40014,05018,00014,70019,0005075Usang the high low method, compute the1ranable cost per program and the2 total fixed cost per monthUing the least squares regressicen method compune the3 vanable cout pe program and the4total fied cost per moeth

Step 1: Compute the variable cost per month: Variable cost per month=19,000-14,05075-45=4,95030=165…

Answered: Action Trainers provides a personalized…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter2: Building Blocks Of Managerial Accounting

Section: Chapter Questions

Problem 11EB: Able Transport operates a tour bus that they lease with terms that involve a fixed fee each month...

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Health-Temp Company is a placement agency for temporary nurses. It serves hospitals and clinics throughout the metropolitan area. Health-Temp Company believes it will place temporary nurses for a total of 23,500 hours next year. Health-Temp charges the hospitals and clinics 90 per hour and has variable costs of 75.60 per hour (this includes the payment to the nurse). Total fixed costs equal 321,000. Required: 1. Calculate the contribution margin per unit and the contribution margin ratio. 2. Calculate the sales revenue needed to break even. 3. Calculate the sales revenue needed to achieve a target profit of 100,000. 4. What if Health-Temp had target operating income (profit) of 110,000? Would sales revenue be larger or smaller than the one calculated in Requirement 3? Why? By how much?
Thames Assurance Company sells a variety of life and health insurance products. Recently, Thames developed a long-term care policy for sale to members of university and college alumni associations. Thames estimated that the sale and service of this type of policy would be subject to a 90 percent cumulative average-time learning curve model. Each unit consists of 350 policies sold. The first unit is estimated to take 1,000 hours to sell and service. Required: 1. Set up a table with columns for cumulative number of units, cumulative average time per unit in hours, and the cumulative total time in hours. Complete the table for 1, 2, 4, 8, 16, and 32 units. 2. Suppose that Thames revises its assumption to an 80 percent learning curve. How will this affect the amount of time needed to sell and service eight units? How do you suppose that Thames estimates the percent learning rate?
Able Transport operates a tour bus that they lease with terms that involve a fixed fee each month plus a charge for each mile driven. Able Transport drove the tour bus 4,000 miles and paid a total of $1,250 in March. In April, they paid $970 for 3.000 miles. What is the variable cost per mile if Able Transport uses the high-low method to analyze costs?
Jean and Tom Perritz own and manage Happy Home Helpers. Inc. (HHH), a house-cleaning service. Each cleaning (cleaning one house one time) takes a team of three house cleaners about 1.5 hours. On average, HHH completes about 15,000 cleanings per year. The following total costs are associated with the total cleanings: Next year, HHH expects to purchase 25,600 of direct materials. Projected beginning and ending inventories for direct materials are as follows: There is no work-in-process inventory and no finished goods inventory; in other words, a cleaning is started and completed on the same day. Required: 1. Prepare a statement of cost of services sold in good form. 2. How does this cost of services sold statement differ from the cost of goods sold statement for a manufacturing firm?
Keleher Industries manufactures pet doors and sells them directly to the consumer via their web site. The marketing manager believes that if the company invests in new software, they will increase their sales by 10%. The new software will increase fixed costs by $400 per month. Prepare a forecasted contribution margin income statement for Keleher Industries reflecting the new software cost and associated increase in sales. The previous annual statement is as follows:
Jean and Tom Perritz own and manage Happy Home Helpers, Inc. (HHH), a house-cleaning service. Each cleaning (cleaning one house one time) takes a team of three house cleaners about 1.5 hours. On average, HHH completes about 15,000 cleanings per year. The following total costs are associated with the total cleanings: Next year, HHH expects to purchase 25,600 of direct materials. Projected beginning and ending inventories for direct materials are as follows: There is no work-in-process inventory; in other words, a cleaning is started and completed on the same day. Required: 1. Prepare a statement of services produced in good form. 2. What if HHH planned to purchase 30,000 of direct materials? Assume there would be no change in beginning and ending inventories of materials. Explain which line items on the statement of services produced would be affected and how (increase or decrease).
Jean and Tom Perritz own and manage Happy Home Helpers, Inc. (HHH), a house-cleaning service. Each cleaning (cleaning one house one time) takes a team of three house cleaners about 1.5 hours. On average, HHH completes about 15,000 cleanings per year. The following total costs are associated with the total cleanings: Next year, HHH expects to purchase 25,600 of direct materials. Projected beginning and ending inventories for direct materials are as follows: There is no work-in-process inventory and no finished goods inventory; in other words, a cleaning is started and completed on the same day. HHH expects to sell 15,000 cleanings at a price of 45 each next year. Total selling expense is projected at 22,000, and total administrative expense is projected at 53,000. Required: 1. Prepare an income statement in good form. 2. What if Jean and Tom increased the price to 50 per cleaning and no other information was affected? Explain which line items in the income statement would be affected and how.
Skip Consulting helped Schmidt Roofers put various cost saving techniques into place. Thecontract specifies that Skip will receive a flat fee of $70,000 and an additional $19,000 if Schmidtattains a target amount of cost savings. Skip estimates a 20% chance that Schmidt will reach thetarget for cost savings. Assuming that Skip uses the expected-value approach, what is thetransaction price for this product?a. $19,000b. $70,000c. $73,800d. $89,000
During each year, CSL Computer Company needs to train 27 service representatives. It costs $12,000 to run a training program, regardless of the number of students being trained. Service reps earn a monthly salaryof $1500, so CSL does not want to train them before they are needed. Each training session takes one month. a. State the assumptions needed for the EOQ model to be applicable. b. How many service reps should be in each training group? c. How many training programs should CSL undertake each year? d. How many trained service reps will be available when each training program begins?
A company manufactures computer games. The games are in demand all year round and in thenext financial year the sales manager plans to sell 12,000 games. The trainee’s managementaccountant has provided the following cost information for 1 unit of computer game. The sellingprice is £10.00, and the variable cost will consist of direct, materials £1 .00 per unit, direct labourcost £5.00 per unit. The fixed cost for the year is expected to be £32,000. Calculate the breakeven units in value and explain what it means to the director
A company manufactures computer games. The games are in demand all year round and in thenext financial year the sales manager plans to sell 12,000 games. The trainee’s managementaccountant has provided the following cost information for 1 unit of computer game. The sellingprice is £10.00, and the variable cost will consist of direct, materials £1 .00 per unit, direct labourcost £5.00 per unit. The fixed cost for the year is expected to be £32,000. Draw up a marginal cost statement on the basis that 12,000 units will be sold and calculate thenet profit or loss
Q2. Image Solutions operates a printing service for customers with digital cameras. The current service, whichrequires employees to download photos from customer cameras, has monthly operating costs of $7,000 plus $0.40per photo printed. Management is evaluating the desirability of acquiring a machine that will allow customers todownload and make prints without employee assistance. If the machine is acquired, the monthly fixed costs willincrease to $13,000 and the variable costs of printing a photo will decline to $0.08 per photo. (a) Determine the total costs of printing 20,000 and 50,000 photos per month. (b) Determine the monthly volume at which the proposed process becomes preferable to the current process.

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