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cost: £ cost Activity (i.e. output or usage) REQUIRED: Prepare a graph for each of the following situations (NOTE: The shape of the graphs is more important than their detailed scaling): i) Rates of the factory premises for half a year costing £50,000. ii) The company telephone account comprising of a quarterly charge of £100 and a cost per call of £0.40. iii) A quantity discount agreement: 5% discount when the monthly order exceeds £2,000 10% discount when the monthly order exceeds £5,000 20% discount when the monthly order exceeds £10,000 A car hire agreement whereby there is: A minimum weekly charge of £50 A charge per mile of £0.10 A maximum weekly charge of £100 iv) v) A labour rate of £1.00 per piece produced in normal time and £1.30 in overtime. vi) Depreciation on Reducing Balance Method vii) A salesman's salary of £1,000 per month with a bonus of 20% if the sales target is achieved.

cost: £ cost Activity (i.e. output or usage) REQUIRED: Prepare a graph for each of the following situations (NOTE: The shape of the graphs is more important than their detailed scaling): i) Rates of the factory premises for half a year costing £50,000. ii) The company telephone account comprising of a quarterly charge of £100 and a cost per call of £0.40. iii) A quantity discount agreement: 5% discount when the monthly order exceeds £2,000 10% discount when the monthly order exceeds £5,000 20% discount when the monthly order exceeds £10,000 A car hire agreement whereby there is: A minimum weekly charge of £50 A charge per mile of £0.10 A maximum weekly charge of £100 iv) v) A labour rate of £1.00 per piece produced in normal time and £1.30 in overtime. vi) Depreciation on Reducing Balance Method vii) A salesman's salary of £1,000 per month with a bonus of 20% if the sales target is achieved.

Managerial Accounting: The Cornerstone of Business Decision-Making
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter3: Cost Behavior And Cost Forecasting
Section: Chapter Questions
Problem 54E: Income Statements under Absorption and Variable Costing In the coming year, Kalling Company expects...
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b) The following graph is given as an example of the cost characteristic of a variable cost: £ cost Activity (i.e. output or usage) REQUIRED: Prepare a graph for each of the following situations (NOTE: The shape of the graphs is more important than their detailed scaling): i) Rates of the factory premises for half a year costing £50,000. ii) The company telephone account comprising of a quarterly charge of £100 and a cost per call of £0.40. iii) A quantity discount agreement: 5% discount when the monthly order exceeds £2,000 10% discount when the monthly order exceeds £5,000 20% discount when the monthly order exceeds £10,000 A car hire agreement whereby there is: A minimum weekly charge of £50 A charge per mile of £0.10 iv) A maximum weekly charge of £100 v) A labour rate of £1.00 per piece produced in normal time and £1.30 in overtime. vi) Depreciation on Reducing Balance Method vii) A salesman's salary of £1,000 per month with a bonus of 20% if the sales target is achieved.
Transcribed Image Text:b) The following graph is given as an example of the cost characteristic of a variable cost: £ cost Activity (i.e. output or usage) REQUIRED: Prepare a graph for each of the following situations (NOTE: The shape of the graphs is more important than their detailed scaling): i) Rates of the factory premises for half a year costing £50,000. ii) The company telephone account comprising of a quarterly charge of £100 and a cost per call of £0.40. iii) A quantity discount agreement: 5% discount when the monthly order exceeds £2,000 10% discount when the monthly order exceeds £5,000 20% discount when the monthly order exceeds £10,000 A car hire agreement whereby there is: A minimum weekly charge of £50 A charge per mile of £0.10 iv) A maximum weekly charge of £100 v) A labour rate of £1.00 per piece produced in normal time and £1.30 in overtime. vi) Depreciation on Reducing Balance Method vii) A salesman's salary of £1,000 per month with a bonus of 20% if the sales target is achieved.
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