Financial and Managerial Accounting
7th Edition
ISBN: 9781259726705
Author: John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher: McGraw-Hill Education
expand_more
expand_more
format_list_bulleted
Textbook Question
Chapter 18, Problem 3QS
Cost behavior estimation---high-low method P1
The following information is available for a company’s maintenance cost over the last seven months. Using the high-low method. Estimate both fixed and variable components of its maintenance cost.
Month | Maintenance Hours | Maintenance Cost |
June…………………………………… | 9 | $5,450 |
July…………………………………… | 18 | 6,900 |
August………………………………... | 12 | 5,100 |
September……………………………... | 15 | 6,000 |
October………………………………... | 21 | 6,900 |
November……………………………… | 24 | 8,100 |
December……………………………… | 6 | 3,600 |
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
QUESTION 4 An organisation manufactures a single product. The following information with regard to the raw material needed in the production process is supplied to you:
Normal delivery time: 2.5 weeksMaximum delivery time: 3.5 weeksNormal usage: 52 000 units per yearPurchase price per unit: R8.50Cost of placing an order: R18.00Interest rate: 2% per yearStoring cost per unit: R2.50
Required:
Calculate the EOQ.
Calculate the re-order point if the organisation does not keep safety stock.
Q3. The information below was derived from the 2018 records of HCS Company:
Month
Units Produced
Total Cost (SAR)
May
4,350
44,200
June
4,700
44,700
July
5,000
45,000
August
5,400
45,400
September
5,650
47,500
October
5,900
57,150
November
3,450
40,000
December
4,100
40,600
Using the high-low method of analysis, calculate
Variable cost
Fixed cost, and
Determine a cost function.
Question 1: Salalah Company has the financial information given in the table for the year ended on 31 December 2020. Calculate the following
Q1) Break-even point (in units and amount)
Q2) PV ratio
Q3) Margin of Safety (as amount and as percentage)
OMR
Sales (actual)
800,000
Total fixed cost
450,000
Selling price per unit
275
Variable cost per unit
125
Chapter 18 Solutions
Financial and Managerial Accounting
Ch. 18 - Prob. 1MCQCh. 18 - Prob. 2MCQCh. 18 - Prob. 3MCQCh. 18 - Prob. 4MCQCh. 18 - Prob. 5MCQCh. 18 - Prob. 1DQCh. 18 - Prob. 2DQCh. 18 - When output volume increases, do fixed costs per...Ch. 18 - How is the cost-volume-profit analysis useful?Ch. 18 - Prob. 5DQ
Ch. 18 - Prob. 6DQCh. 18 - Prob. 7DQCh. 18 - Prob. 8DQCh. 18 - Prob. 9DQCh. 18 - Prob. 10DQCh. 18 - Prob. 11DQCh. 18 - Prob. 12DQCh. 18 - Prob. 13DQCh. 18 - Prob. 14DQCh. 18 - Prob. 15DQCh. 18 - Prob. 16DQCh. 18 - Prob. 17DQCh. 18 - Prob. 18DQCh. 18 - Prob. 19DQCh. 18 - APPLE Should Apple use single product or...Ch. 18 - Prob. 21DQCh. 18 - Prob. 22DQCh. 18 - Prob. 1QSCh. 18 - Prob. 2QSCh. 18 - Cost behavior estimation---high-low method P1 The...Ch. 18 - Prob. 4QSCh. 18 - Prob. 5QSCh. 18 - Prob. 6QSCh. 18 - Prob. 7QSCh. 18 - Prob. 8QSCh. 18 - Prob. 9QSCh. 18 - Prob. 10QSCh. 18 - Prob. 11QSCh. 18 - Prob. 12QSCh. 18 - Prob. 13QSCh. 18 - Prob. 14QSCh. 18 - Prob. 15QSCh. 18 - Prob. 16QSCh. 18 - Prob. 17QSCh. 18 - Prob. 18QSCh. 18 - Prob. 19QSCh. 18 - Prob. 20QSCh. 18 - Prob. 21QSCh. 18 - Following are five graphs representing various...Ch. 18 - Prob. 2ECh. 18 - Prob. 3ECh. 18 - Prob. 4ECh. 18 - Prob. 5ECh. 18 - Prob. 6ECh. 18 - Prob. 7ECh. 18 - Prob. 8ECh. 18 - Prob. 9ECh. 18 - Prob. 10ECh. 18 - Prob. 11ECh. 18 - Prob. 12ECh. 18 - Prob. 13ECh. 18 - Prob. 14ECh. 18 - Prob. 15ECh. 18 - Prob. 16ECh. 18 - Prob. 17ECh. 18 - Prob. 18ECh. 18 - Prob. 19ECh. 18 - Prob. 20ECh. 18 - Prob. 21ECh. 18 - Prob. 22ECh. 18 - Prob. 23ECh. 18 - Prob. 24ECh. 18 - Prob. 25ECh. 18 - Prob. 26ECh. 18 - Prob. 27ECh. 18 - Prob. 1PSACh. 18 - Prob. 2PSACh. 18 - Prob. 3PSACh. 18 - Prob. 4PSACh. 18 - Prob. 5PSACh. 18 - Prob. 6PSACh. 18 - Prob. 7PSACh. 18 - Prob. 1PSBCh. 18 - Prob. 2PSBCh. 18 - Prob. 3PSBCh. 18 - Prob. 4PSBCh. 18 - Prob. 5PSBCh. 18 - Prob. 6PSBCh. 18 - Prob. 7PSBCh. 18 - Prob. 18SPCh. 18 - Apple offers extended service contracts that...Ch. 18 - Prob. 2BTNCh. 18 - Prob. 3BTNCh. 18 - Prob. 4BTNCh. 18 - Prob. 5BTNCh. 18 - Prob. 6BTNCh. 18 - Prob. 7BTNCh. 18 - Prob. 8BTNCh. 18 - Prob. 9BTN
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- PLS ANSWER AND SHOW SOLUTION #10 The following monthly data are available for Tugg, Inc. which produces only one product: Selling price per unit, P42; Unit variable expenses, P14; Total fixed expenses, P70,000; Actual sales for the month of June, 4,000 units. How much is the margin of safety for the company for June?arrow_forwardQuestion Q1Moona Inc. produces Mobile phones. Information of the company's operations last year appear below: Fixed cost:Fixed Manufacturing overhead Rs 40,000Fixed Selling & Administrative Rs 60,000Selling Price per unit Rs 100Variable cost per unit:Direct Materials Rs 30Direct labor Rs 10Variable Manufacturing overhead Rs 5Variable Selling & Administrative Rs 2Units In beginning Inventory 0Units Produced 2000Units Sold 1900 Required: a. Compute the unit product cost under both absorption and variable costing.b. Prepare an income statement for the year using absorption costing.c. Prepare a contribution format income statement for the year using variable costing. d. Prepare a report reconciling the difference in net operating income between absorption and variable costing for the year.arrow_forwardCH11_HW_QA2_PIR Required 1: 1-a. Compute the throughput time for each month. 1-b. Compute the manufacturing cycle efficiency (MCE) for each month. 1-c. Compute the delivery cycle time for each month. (Round your answers to 1 decimal place.) Throughput Time Manufacturing Cycle Efficiency (MCE) Delivery Cycle Time Month 1 days % days Month 2 days % days Month 3 days % days Month 4 days % days Required 3: 3-a. (Month 5) Refer to the inspection time, process time, and so forth, given for month 4. Assume that in month 5 the inspection time, process time, and so forth, are the same as for month 4, except that the company is able to completely eliminate the queue time during production using Lean Production. Compute the new throughput time and MCE. 3-b. (Month 6) Refer to the inspection time, process time, and so forth, given for month 4. Assume that in month 6 the inspection time, process time, and so…arrow_forward
- Exercise 5-18 (Algo) Break-Even and Target Profit Analysis; Margin of Safety; CM Ratio [LO5-1, LO5-3, LO5-5, LO5-6, LO5-7] Menlo Company distributes a single product. The company’s sales and expenses for last month follow: Total Per Unit Sales $ 616,000 $ 40 Variable expenses 431,200 28 Contribution margin 184,800 $ 12 Fixed expenses 154,800 Net operating income $ 30,000 Required: 3-b. Verify your answer by preparing a contribution format income statement at the target sales level. 4. Refer to the original data. Compute the company's margin of safety in both dollar and percentage terms. 5. What is the company’s CM ratio? If the company can sell more units thereby increasing sales by $83,000 per month and there is no change in fixed expenses, by how much would you expect monthly net operating income to increase?arrow_forwardProblem Please solve all parts i need all answers The controller of Sunland Production has collected the following monthly expense data for analyzing the cost behavior of electricity costs. TotalElectricity Costs TotalMachine Hours January $2,490 250 February 3,000 320 March 3,530 460 April 4,740 695 May 3,160 450 June 4,900 790 July 4,130 625 August 3,890 590 September 5,170 680 October 4,220 610 November 3,290 320 December 6,410 810 Determine the fixed- and variable-cost components using the high-low method. Fixed-costs $ Variable-costs $ LINK TO TEXT LINK TO TEXT What electricity cost does the cost equation estimate for a level of activity of 460 machine hours? Electricity costs $…arrow_forward5. Calculate the direct material from the following information: Direct expenses RO 90,000, Direct labor RO 20,000, manufacturing overheads RO 30,000 and prime cost RO 170,000. a.RO 21,000 b.RO18,000 c.RO 60,000 d.RO 20,000 6. Which of the following are used for calculating economic order frequency? i. Total annual consumption ii. No of order per year iii. Buying cost per order iv. 365 days a.i and ii b.ii and iv c.iii and iv d.i and ivarrow_forward
- High-Low Method The manufacturing costs of Ackerman Industries for the first three months of the year follow: Total Costs Units Produced January $1,900,000 20,000 units February 2,250,000 27,000 March 2,400,000 30,000 Using the high-low method, determine (a) the variable cost per unit and (b) the total fixed cost. a. Variable cost per unit $ b. Total fixed cost $ Feedbackarrow_forwardQUESTION 4 An organisation manufactures a single product. The following information with regard to the raw material needed in the production process is supplied to you: Normal delivery time: 2.5 weeksMaximum delivery time: 3.5 weeksNormal usage: 52 000 units per yearPurchase price per unit: R8.50Cost of placing an order: R18.00Interest rate: 2% per yearStoring cost per unit: R2.50 Required: Calculate the re-order point if the organisation has a policy to keep safety stock. Calculate the safety stock that should be kept by the organisation.arrow_forwardMANAGEMENT ACCOUNTING ANSWER QUESTION 3 AND 4 ONLY The following information is extracted from Kobena Company’s records for Product A, Period 1; Units produced 18,000 units Units sold (RM27 per unit) 17,200 units Budgeted units 18,000 units Variable production cost per unit RM17 Fixed cost: Fixed production overheads Fixed administration costs RM45,000 RM13,000 There were no opening inventories at the beginning of the period. By referring to the information given for Product A, you are required to: i) Calculate the predetermined overheads absorption rate per unit based on unit of production. ii) Calculate total production cost per unit. iii) The value of closing inventory in Ringgit Malaysia (RM). iv) Prepare Absorption Costing Statement of Profit and Loss for Period 1.arrow_forward
- High-Low Method for a Service Company Continental Railroad decided to use the high-low method and operating data from the past six months to estimate the fixed and variable components of transportation costs. The activity base used by Continental Railroad is a measure of railroad operating activity, termed "gross-ton miles," which is the total number of tons multiplied by the miles moved. Transportation Costs Gross-Ton Miles January $831,600 369000 February 927,200 412000 March 655,300 267000 April 889,000 399,000 May 745,600 321,000 June 955,900 434,000 Determine the variable cost per gross-ton mile and the total fixed cost. Variable cost (Round to two decimal places.) $____ per gross-ton mile Total fixed cost $____arrow_forwardPrint Item Question Content Area High-Low Method The manufacturing costs of Kellam Industries for the first three months of the year follow: Total Costs Units Produced January $425,700 2,365 units February 565,710 4,420 March 662,200 6,665 Using the high-low method, determine (a) the variable cost per unit and (b) the total fixed cost. a. Variable cost per unit $fill in the blank 1 b. Total fixed cost $fill in the blank 2arrow_forwardQuestion 2 XYZ Company produces and sells only two products since year 2000. Data concerning those products for March 2020 appear below: Product A Product B March Sales $25,000 $27,000 March Variable costs $7,000 $8,600 March Fixed costs $32,860 Required: As a Senior Manager at XYZ Company, your General Manager asked you to determine the total sales of the company in $ for product A and for product B that should be achieved to cover both variable and fixed costs for the month of March by using the company's contribution margin. The level of competition in the market was acceptable and manageable by the Company. In March, 2020, a new potential competitor is doing a market research to decide on entering the market with a product similar to Product A. The General Manager asked for your advice if the company should shift the sales mix toward Product B with no change in total sales (as the sales of product B is more than product…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Financial & Managerial AccountingAccountingISBN:9781285866307Author:Carl Warren, James M. Reeve, Jonathan DuchacPublisher:Cengage LearningCornerstones of Cost Management (Cornerstones Ser...AccountingISBN:9781305970663Author:Don R. Hansen, Maryanne M. MowenPublisher:Cengage LearningPkg Acc Infor Systems MS VISIO CDFinanceISBN:9781133935940Author:Ulric J. GelinasPublisher:CENGAGE L
Financial & Managerial Accounting
Accounting
ISBN:9781285866307
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Cengage Learning
Cornerstones of Cost Management (Cornerstones Ser...
Accounting
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Cengage Learning
Pkg Acc Infor Systems MS VISIO CD
Finance
ISBN:9781133935940
Author:Ulric J. Gelinas
Publisher:CENGAGE L
What is Risk Management? | Risk Management process; Author: Educationleaves;https://www.youtube.com/watch?v=IP-E75FGFkU;License: Standard youtube license