Neptune Rentals operates a boat rental service. Consider the following costs of the company over the rel- evant range of 5,000 to 8,000 hours of operating time for its boats: Total costs: Variable costs. Fixed costs. ..... ... Total costs... Cost per hour: Variable cost. Fixed cost.. Total cost per hour ... 5,000 $ Hours of Operating Time 6,000 7,000 $ 20,000 168,000 $188,000 $ $ ? $ ? ? $ ? ? $ 60 $ ? ? ? $ 69 8,000 $ ? $ ? ? $ ? ? ? ? ? Required: Compute the missing amounts, assuming that cost behavior patterns remain unchanged within the relevant range of 5,000 to 8,000 hours.

Neptune Rentals operates a boat rental service. Consider the following costs of the company over the rel- evant range of 5,000 to 8,000 hours of operating time for its boats: Total costs: Variable costs. Fixed costs. ..... ... Total costs... Cost per hour: Variable cost. Fixed cost.. Total cost per hour ... 5,000 $ Hours of Operating Time 6,000 7,000 $ 20,000 168,000 $188,000 $ $ ? $ ? ? $ ? ? $ 60 $ ? ? ? $ 69 8,000 $ ? $ ? ? $ ? ? ? ? ? Required: Compute the missing amounts, assuming that cost behavior patterns remain unchanged within the relevant range of 5,000 to 8,000 hours.

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...

See similar textbooks

Similar questions

Polaris Inc. manufactures two types of metal stampings for the automobile industry: door handles and trim kits. Fixed cost equals 146,000. Each door handle sells for 12 and has variable cost of 9; each trim kit sells for 8 and has variable cost of 5. Required: 1. What are the contribution margin per unit and the contribution margin ratio for door handles and for trim kits? 2. If Polaris sells 20,000 door handles and 40,000 trim kits, what is the operating income? 3. How many door handles and how many trim kits must be sold for Polaris to break even? 4. CONCEPTUAL CONNECTION Assume that Polaris has the opportunity to rearrange its plant to produce only trim kits. If this is done, fixed costs will decrease by 35,000, and 70,000 trim kits can be produced and sold. Is this a good idea? Explain.
Total costs for ABC Distributing are $250,000 when the activity level is 10,000 units. If variable costs are $5 per unit, what are their fixed costs? $240,000 $200,000 $260,000 Their fixed costs cannot be determined from the information presented.
Mario Company is considering discontinuing a product. The costs of the product consist of $20,000 fixed costs and $15,000 variable costs. The variable operating expenses related to the product total $4,000. What is the differential cost? A. $19,000 B. $15,000 C. $35,000 D. $39,000
Manatoah Manufacturing produces 3 models of window air conditioners: model 101, model 201, and model 301. The sales price and variable costs for these three models are as follows: The current product mix is 4:3:2. The three models share total fixed costs of $430,000. Calculate the sales price per composite unit. What is the contribution margin per composite unit? Calculate Manatoahs break-even point in both dollars and units. Using an income statement format, prove that this is the break-even point.
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.
Neptune Rentals operates a boat rental service. Consider the following costs of the company over the relevant range of 5,000 to 8,000 hours of operating time for its boats:Hours of Operating Time5,000 6,000 7,000 8,000Total costs:Variable costs ............... $ 20,000 $ ? $ ? $ ?Fixed costs ................... 168,000 ? ? ?Total costs ....................... $188,000 $ ? $ ? $ ?Cost per hour:Variable cost ................. $ ? $ ? $ ? $ ?Fixed cost ..................... ? ? ? ?Total cost per hour ........... $ ? $ ? $ ? $ ?Required:Compute the missing amounts, assuming that cost behavior patterns remain unchanged within the relevantrange of 5,000 to 8,000 hours.
Luca Co offers machine rental services for concrete cutting. Consider the following costs of the company over the relevant range of 4,000 to 10,000 hours of operating time for its concrete cutting equipment. Hours of Operating Time 4,000 5,000 8,000 10,000 Total Costs: Variable Costs $ 20,000 ? ? ? Fixed Costs 82,000 ? ? ? Total Costs $102,000 ? ? ? Cost per hour: Variable cost ? ? ? ? Fixed cost ? ? ? ? Total cost per hour ? ? ? ? What is the estimated total cost per hour at a volume of 8,000 hours?
You are the Chief Financial Officer of Max Gifts Company. A small company that sells Italian Memorabilia which are (1) snow globes with boats and (2) snow globes with buildings inside. The company's August 2021 sales and expenses are provided below: Boats Globe Building Globe Sales $20,000 $80,000 Variable Cost $15,000 $40,000 No. Momorabilia sold 200 1000 Sales Mix 20% 80% Monthly Fixed costs are $37,000. Required: a. Compute the contribution margin per unit for each product.
Luisa Rentals offers machine rental services for concrete cutting. Consider the following costs of the company over the relevant range of 4,000 to 10,000 hours of operating time for its concrete cutting equipment. Hours of Operating Time 4,000 5,000 8,000 10,000 Total Costs: Variable Costs $ 20,000 ? ? ? Fixed Costs 82,000 ? ? ? Total Costs $102,000 ? ? ? Cost per hour: Variable cost ? ? ? ? Fixed cost ? ? ? ? Total cost per hour ? ? ? ? What are the estimated total costs at a volume of 5,000 hours?
You are the Chief Financial Officer of Max Gifts Company. A small company that sells Italian Memorabilia which are (1) snow globes with boats and (2) snow globes with buildings inside. The company's August 2021 sales and expenses are provided below: Boats Globe Building Globe Sales $20,000 $80,000 Variable Cost $15,000 $40,000 No. Momorabilia sold 200 1000 Sales Mix 20% 80% Monthly Fixed costs are $37,000. Required: b. Compute the weighted average contribution margin per unit.
You are the Chief Financial Officer of Max Gifts Company. A small company that sells Italian Memorabilia which are (1) snow globes with boats and (2) snow globes with buildings inside. The company's August 2021 sales and expenses are provided below: Boats Globe Building Globe Sales $20,000 $80,000 Variable Cost $15,000 $40,000 No. Momorabilia sold 200 1000 Sales Mix 20% 80% Monthly Fixed costs are $37,000. Required: d. Compute the contribution margin ratio for each product.
Paty Ltd operating business of containers and it is contemplating two cost structures for its operations. It has high variable cost pu containers with lower annual fixed costs It has lower variable cost with higher fixed cost. Plan A: Per container revenue=100 Variable cost per container delivered=85 Cost=1,200,000 Plan B: Per container revenue=100 Variable cost per container delivered=60 Cost=4,500,000 Required: 1.BEP (In volumes) for both the plans 2.Under plan A to produce an operating income of 30,000? 3.Containers to be made under plan A to produce an operating margin which is equal to 9% of sales revenue in total.