Classify each cost element as either fixed, variable, or mixed
Q: The major categories or captions that would appear on an income statement prepared in the variable…
A: Variable costing: Under this method, all cost is divided into two parts. The first part is a…
Q: REQUIRED: Compute the weighted units and cost per unit of each product.
A: Weighted Units = Points x Units Cost per Unit = Apportioned Production CostUnits Produced
Q: se explain the answer thoroughly. Is this statement "if all the allocation base in the…
A: Allocation base in the predetermined overhead rate is the percentage of overhead which will be…
Q: The left column lists several cost classifications. The right column presents short definitions of…
A: Fixed Cost: Fixed cost refers the cost which remains constant for particular time duration and there…
Q: In applying the high-low method of cost estimation to mixed costs, how is the total fixed cost…
A: Mixed cost also called the semi variable cost . Mixed cost contains both fixed and variable cost .…
Q: Explain the methods of segregating semi-variable costs into fixed and variable cost.
A: Variable cost is the cost which remains variable and fluctuate according to the level of production.…
Q: Which of the following best describes a fixed cost? a. Cost representing a fixed proportion of…
A: Fixed Cost: It is a cost that does not change with the change in the level of output. It is the…
Q: he following statements is true? bsorption costing treats fixed overhead as an expense in the period…
A: The income statement is prepared using various methods as absorption costing and variable costing.…
Q: Cost Relationships The following costs are for Optical View Inc., a contact lens manufacturer:…
A: Total Cost of production includes both fixed cost and variable costs. Variable costs are those which…
Q: A number of graphs displaying cost behavior patterns are shown below. The vertical axis on each…
A: A. Electricity bill graph is 6 as in this graph, the cost is constant for some specified volume and…
Q: On the cost reconciliation part of the production report, the weighted-average method treats…
A: Periodic inventory system: The method or system of recording the transactions related to inventory…
Q: Classify each of the following items of factory overhead as either a fixed or a variable cost.…
A: The question is based on the concept of Cost Accounting. Classification of fixed and variable costs:…
Q: Consumption ratios are useful in determining: A. the existence of product-line diversity. B.…
A: Cost Accounting: It is the process of collecting, recording, analyzing the cost, summarizing cost,…
Q: On a CVP graph, the total cost line intersects the vertical (dollars) axis at the origin. the level…
A: Cost-Volume-Profit Analysis (CVP Analysis): CVP Analysis is a tool of cost accounting that measures…
Q: Which of the following statements regarding graphs of fixed and variable costs is true? (a)…
A: Cost: In accounting, the cost is related to monetary value spend on raw material, services, and…
Q: Under full absorption costing, which of the following are included in product costs? Only variable…
A: The absorption costing system is also known as the full costing system. It is allowed to be used by…
Q: Which of the following are assumptions associated with the cost equation? Check all that apply. The…
A: Cost equation means a line or formula which shows both types of cost like fixed costs and variable…
Q: The “fixed cost per unit function” may also be described as: a.an asymptote b.the total cost line…
A: Introduction:- Fixed costs, also known as indirect costs or overhead costs, are corporate expenses…
Q: Net income computed using absorption costing can be reconciled to the net income computed using…
A: The difference of income between absorption costing and variable costing only occurs only due to the…
Q: When using the visual-fit method to estimate a cost function, we can estimate the fixed cost by O…
A: Visual Fit Method It is the most common method used by analysts for examining the cost by the way…
Q: ) Classify each cost element as either fixed, variable, or mixed b) Calculate: i) the variable…
A: Solution Answer for part a) and part b) i) and ii) is given Concept The formula for high low method…
Q: On a CVP graph, the intersection of the sales revenue line and the total cost line is known as the:…
A: CVP stands for Cost-Volume-Profit analysis. It is helpful in determining the change in the total…
Q: Provide a general discussion on the predetermined variable overhead criterion and its possible…
A: Please find the answer to the above question below:
Q: The primary difference between variable costing and absorption costing is in variable costing,…
A: Absorption Costing: “Absorption costing is a method that allocates “direct labor, direct materials,…
Q: Costs treated as product costs under direct costing are: A. Variable production cost only B. All…
A: Direct Costing: Costs related to production of the product only are assigned to the product and…
Q: The "x" in the overhead cost equation, y = $5.50x + $92,000, represents which of the following?…
A: Variable cost per unit = (Highest activity cost - Lowest activity cost) / (Highest activity units -…
Q: Assuming that direct labor is a variable cost, the primary difference between the absorption and…
A: Major difference between absorption and variable costing is fixed cost allocation across all units…
Q: Based on below, Activity-Based Costing and Analysis Cost Behavior and Cost-Volume-Profit Analysis…
A: Under cost-profit volume analysis, the break-even point is that level of production where the…
Q: Is a variable costing income statement applicable to service operations? If so, provide a…
A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: Which of the following statements is true? O a. Activity-based costs per unit are always greater…
A: The volume based costing represents the cost allocation to a single cost pool. The high volume…
Q: The difference between marginal costing and absorption costing net income centres on how to account…
A: Absorption costing means that inventory is valued at total manufacturing cost including fixed…
Q: The primary difference between variable costing and absorption costing is a. in variable costing,…
A:
Q: Which of the following is a characteristic of a contribution margin income statement? Fixed and…
A: There are two types of costs that are being incurred in the business, one is fixed costs and other…
Q: a) Classify each cost element as either fixed, variable, or mixed b) Calculate: i) the variable…
A: Workings Particulars Lower limit Upper limit Using High-low method Variable Fixed…
Q: Distinguish between ( a ) a variable cost, ( b ) a mixed cost, and ( c ) a step-variable cost. Plot…
A: Total cost Total cost refers to the cost which allows the business owners to trace the combined…
Q: For each of the following statements, indicate whether it is true, false, or uncertain. a. A cost is…
A: Total cost is the summation of fixed costs and variable costs incurred in the process of production.…
Q: On the variable costing income statement, the figure representing the difference between…
A: Variable costing income statement: Particulars Amount Sales xx Less: Cost of goods sold…
Q: Total cost is a combination of fixed and variable costs. The algebraic equation, where T =…
A: Provide the algebraic equation for total cost.
Q: Which of the following is true about the hypothesis test of cost parameters? a) It indicates whether…
A: Hypothesis testing refers to the form of inferable statistics which allows us in making conclusions…
Q: On a graph, if a horizontal axis represents units of production and the vertical axis represents…
A: Solution: Total variable cost is dependent on nos of units produced and same will increase in same…
Q: Which one of the following is correct about variable costing systems? Select one: a. Normally result…
A: Under the variable costing system, the product cost includes direct material, direct labor, direct…
Q: Explain the difference between variable costing and absorption costing income statements. Provide a…
A: Difference Between Variable Costing and absorption costing income statements. Under Variable…
Q: The direct costs of materials that change with the number of units produced is an example of a fixed…
A: False, the direct cost of materials is not an example of fixed production cost because it is a…
Q: Which of the following is a correct statement? OA the fixed manufacturing cost is based on a per…
A: Fixed manufacturing cost is a fixed overhead cost. Under Variable Costing, fixed overhead cost is…
Q: its own predetermined variable overhead criterion.
A: Please find the answer to the above question below:
Q: Required: Compute the unit product cost under absorption costing. Compute the unit product cost…
A: Variable costing means that inventory is valued at variable manufacturing cost and fixed cost is…
Q: Assuming that direct labor is a variable cost, the primary difference between the absorption and…
A: Answer: Option 3.
Q: What is the difference between variable costing and absorption costing income statements? a.…
A: Cost accounting is widely used by cost accountants to determine the cost of the product produced in…
Q: Classify each cost element as either fixed, variable or mixed Calculate: the variable production…
A: Using high low method, variable cost per unit is calculated as follows: Variable cost per unit=…
Q: Using graphs, show how a semivariable (or mixed) cost behavior pattern can be used to approximate…
A:
The background info is provided in the image attached. Solve the following:
a) Classify each cost element as either fixed, variable, or mixed.
b) Calculate:
i) the variable production cost per unit and the total fixed production overhead.
ii) The total variable cost per unit and the total fixed costs
Hint: Use the high-low method to separate mixed costs into their fixed and variable components.
Step by step
Solved in 3 steps
- Gent Designs requires three units of part A for every unit of Al that it produces. Currently, part A is made by Gent, with these per-unit costs in a month when 4.000 units were produced: Variable manufacturing overhead is applied at $1.00 per unit. The other $0.30 of overhead consists of allocated fixed costs. Gent will need 6,000 units of part A for the next years production. Cory Corporation has offered to supply 6,000 units of part A at a price of $7.00 per unit. It Gent accepts the offer, all of the variable costs and $1,200 of the fixed costs will be avoided. Should Gent Designs accept the offer from Cory Corporation?Ottis, Inc., uses 640,000 plastic housing units each year in its production of paper shredders. The cost of placing an order is 30. The cost of holding one unit of inventory for one year is 15.00. Currently, Ottis places 160 orders of 4,000 plastic housing units per year. Required: 1. Compute the economic order quantity. 2. Compute the ordering, carrying, and total costs for the EOQ. 3. How much money does using the EOQ policy save the company over the policy of purchasing 4,000 plastic housing units per order?Deuce Sporting Goods manufactures a high-end model tennis racket. The company’s forecasted income statement for the year, before any special orders, is as follows: Fixed costs included in the forecasted income statement are $400,000 in manufacturing cost of goods sold and $200,000 in selling expenses. A new client placed a special order with Deuce, offering to buy 1,000 tennis rackets for $100.00 each. The company will incur no additional selling expenses if it accepts the special order. Assuming that Deuce has sufficient capacity to manufacture 1,000 more tennis rackets, by what amount would differential income increase (decrease) as a result of accepting the special order? (Hint: First compute the variable cost per unit relevant to this decision.)
- Zippy Inc. manufactures a fuel additive, Surge, which has a stable selling price of 44 per drum. The company has been producing and selling 80,000 drums per month. In connection with your examination of Zippys financial statements for the year ended September 30, management has asked you to review some computations made by Zippys cost accountant. Your working papers disclose the following about the companys operations: Standard costs per drum of product manufactured: Materials: Costs and expenses during September: Chemicals: 645,000 gallons purchased at a cost of 1,140,000; 600,000 gallons used. Empty drums: 94,000 purchased at a cost of 94,000; 80,000 drums used. Direct labor: 81,000 hours worked at a cost of 816,480. Factory overhead: 768,000. Required: Calculate the following for September, using the formulas on pages 421422 and 424 (Round unit costs to the nearest whole cent and compute the materials variances for both Surge and for the drums.): 1. Materials quantity variance. 2. Materials purchase price variance. 3. Labor efficiency variance. 4. Labor rate variance.Marcotti Cupcakes bakes and sells a basic cupcake for $1.25. The cost of producing 600,000 cupcakes in the prior year was: At the start of the current year, Marcotti received a special order for 15,000 cupcakes to be sold for $1.10 per cupcake. To complete the order, the company must incur an additional $700 in total fixed costs to lease a special machine that will stamp the cupcakes with the customers logo. This order will not affect any of Marcottis other operations and it has excess capacity to fulfill the contract. Should the company accept the special order? (Show your work.)Self-Construction Olson Machine Company manufactures small and large milling machines. Selling prices of these machines range from 35,000 to 200,000. During the 5-month period from August 1, 2019, through December 31, 2019, Olson manufactured a milling machine for its own use. This machine was built as part of the regular production activities. The project required a large amount of time front planning and supervisory personnel, as well as that of some of the companys officers, because it was a more sophisticated type of machine than the regular production models. Throughout the 5-month period, Olson charged all costs directly associated with the construction of the machine to a special account entitled Asset Construction Account. An analysis of the charges to this account as of December 31, 2019, follows: Olson allocates factory overhead to normal production as a percent of direct labor dollars as follows: Olson uses a flat rate of 40% of direct labor dollars to allocate general and administrative overhead. During the machine testing period, a cutter head malfunctioned and did extensive damage to the machine table and one cutter housing. This damage was not anticipated and was the result of an error in the assembly operation. Although no additional raw materials were needed to make the machine operational after the accident, the following labor for rework was required: Olson has included all these labor charges in the asset construction account. In addition, it included in the account the repairs and maintenance charges of 1,340 that it incurred as a result of the malfunction. Required: 1. Compute, consistent with GAAP and common practice, the amount that Olson should capitalize for the milling machine as of December 31, 2019, when it declares the machine operational. 2. Next Level Identify the costs you included in Requirement 1 for which there are acceptable alternative procedures. Describe the alternative procedure(s) in each case.
- Bethany Company has just completed the first month of producing a new product but has not yet shipped any of this product. The product incurred variable manufacturing costs of 5,000,000, fixed manufacturing costs of 2,000,000, variable marketing costs of 1,000,000, and fixed marketing costs of 3,000,000. Under the variable costing concept, the inventory value of the new product would be: a. 5,000,000. b. 6,000,000. c. 8,000,000. d. 11,000,000.Hatch Manufacturing produces multiple machine parts. The theoretical cycle time for one of its products is 65 minutes per unit. The budgeted conversion costs for the manufacturing cell dedicated to the product are 12,960,000 per year. The total labor minutes available are 1,440,000. During the year, the cell was able to produce 0.6 units of the product per hour. Suppose also that production incentives exist to minimize unit product costs. Required: 1. Compute the theoretical conversion cost per unit. 2. Compute the applied conversion cost per minute (the amount of conversion cost actually assigned to the product). 3. Discuss how this approach to assigning conversion cost can improve delivery time performance. Explain how conversion cost acts as a performance driver for on-time deliveries.Patterson Corporation expects to incur 70,000 of factory overhead and 60,000 of general and administrative costs next year. Direct labor costs at 5 per hour are expected to total 50,000. If factory overhead is to be applied per direct labor hour, how much overhead will be applied to a job incurring 20 hours of direct labor? a. 120 b. 260 c. 28 d. 140
- Bobcat uses a traditional cost system and estimates next years overhead will be $800.000, as driven by the estimated 25,000 direct labor hours. It manufactures three products and estimates the following costs: If the labor rate is $30 per hour, what is the per-unit cost of each product?Zena Technology sells arc computer printers for $55 per unit. Unit product costs are: A special order to purchase 15,000 arc printers has recently been received from another company and Zena has idle capacity to fill the order. Zena will incur an additional $2 per printer for additional labor costs due to a slight modification the buyer wants made to the original product. One-third of the manufacturing overhead costs is fixed and will be incurred no matter how many units are produced. When negotiating the price, what is the minimum selling price that Zena should accept for this special order?Markson and Sons leases a copy machine with terms that include a fixed fee each month plus acharge for each copy made. Markson made 9,000 copies and paid a total of $480 in January. In April, they paid $320 for 5,000 copies. What is the variable cost per copy if Markson uses the high-low method to analyze costs?