FUND. ACCOUNTING PRINCIPLES >CUSTOM<
24th Edition
ISBN: 9781307417692
Author: Wild
Publisher: MCG/CREATE
expand_more
expand_more
format_list_bulleted
Concept explainers
Textbook Question
Chapter 18, Problem 3QS
Fixed and variable costs
C2
Listed below are product costs for production of footballs. Classify each cost as either variable (V) or fixed (F).
______1. Leather covers for footballs
______2. Machinery
______3. Wages of assembly workers
______4. Lace to hold footballs together
______5. Insurance premium on building
______6. Factory supervisor salary
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
2. Unit costs for variable manufacturing expenses based on Nov (October) amounts:Leather used in seats: ________________________ = $____/bikeElectricity: ___________________________________= $___/bikeEmployee benefits____________________________ = $____/bikeDecember manufacturing costs:ItemPer unitAmount Activity CostLeather in seatsElectricity - variableEmployee benefitsProduction manager’s salary n/aElectricity - fixed n/aProperty taxes n/a
4. Assuming direct labor is a fixed cost:
a. Determine the number of WVD drums (if any) that should be purchased and the number of WVD drums and/or bike frames (if any) that should be manufactured.
b. What is the increase (decrease) in net operating income that would result from this plan over current operations?
5. Compute the contribution margin per unit. [assume direct labor is a variable cost]
6. Compute the contribution margin per welding hour. [assume direct labor is a variable cost]
Kingsland Metalworks manufactures custom chairs and ships them to customers using UPS. Assume stable shipping prices. Which two terms describe the cost of shipping these chairs?a. Variable cost and product costb. Variable cost and period costc. Fixed cost and product costd. Fixed cost and period cost
Chapter 18 Solutions
FUND. ACCOUNTING PRINCIPLES >CUSTOM<
Ch. 18 - Prob. 1DQCh. 18 - Prob. 2DQCh. 18 - Prob. 3DQCh. 18 - Prob. 4DQCh. 18 - Prob. 5DQCh. 18 - Prob. 6DQCh. 18 - Prob. 7DQCh. 18 - Prob. 8DQCh. 18 - Prob. 9DQCh. 18 - Prob. 10DQ
Ch. 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 - List the four components of a schedule of cost of...Ch. 18 - Prepare a proper title for the annual schedule of...Ch. 18 - Prob. 22DQCh. 18 - Prob. 23DQCh. 18 - Prob. 24DQCh. 18 - Prob. 25DQCh. 18 - Prob. 1QSCh. 18 - Prob. 2QSCh. 18 - Fixed and variable costs C2 Listed below are...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. 1ECh. 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 - Exercise 18-12 Components of accounting reports P2...Ch. 18 - Prob. 13ECh. 18 - Prob. 14ECh. 18 - Prob. 15ECh. 18 - Prob. 16ECh. 18 - Prob. 17ECh. 18 - Prob. 18ECh. 18 - Prob. 19ECh. 18 - Prob. 1APSACh. 18 - Prob. 2APSACh. 18 - Prob. 3APSACh. 18 - Prob. 4APSACh. 18 - Problem 18-5A Inventory computation and reporting...Ch. 18 - Prob. 1BPSBCh. 18 - Prob. 2BPSBCh. 18 - Prob. 3BPSBCh. 18 - Prob. 4BPSBCh. 18 - Prob. 5BPSBCh. 18 - Prob. 18SPCh. 18 - Prob. 1AACh. 18 - Prob. 2AACh. 18 - Prob. 3AACh. 18 - Prob. 1BTNCh. 18 - Prob. 2BTNCh. 18 - Prob. 3BTNCh. 18 - Prob. 4BTNCh. 18 - Prob. 5BTNCh. 18 - Prob. 6BTN
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
- Variable and Fixed Costs, Cost Formula, High-Low Method Li Ming Yuan and Tiffany Shaden are the department heads for the accounting department and human resources department, respectively, at a large textile firm in the southern United States. They have just returned from an executive meeting at which the necessity of cutting costs and gaining efficiency has been stressed. After talking with Tiffany and some of her staff members, as well as his own staff members, Li Ming discovered that there were a number of costs associated with the claims processing activity. These costs included the salaries of the two paralegals who worked full time on claims processing, the salary of the accountant who cut the checks, the cost of claims forms, checks, envelopes, and postage, and depreciation on the office equipment dedicated to the processing. Some of the paralegals time appears to vary with the routine processing of uncontested claims, but considerable time also appears to be spent on the claims that have incomplete documentation or are contested. The accountants time appears to vary with the number of claims processed. Li Ming was able to separate the costs of processing claims from the costs of running the departments of accounting and human resources. He gathered the data on claims processing cost and the number of claims processed per month for the past 6 months. These data are as follows: Required: 1. Classify the claims processing costs that Li Ming identified as variable and fixed. 2. What is the independent variable? The dependent variable? 3. Use the high-low method to find the fixed cost per month and the variable rate. What is the cost formula? 4. CONCEPTUAL CONNECTION Suppose that an outside company bids on the claims processing business. The bid price is 4.60 per claim. If Tiffany expects 75,600 claims next year, should she outsource the claims processing or continue to do it in-house?arrow_forward(Appendix 3A) Separating Fixed and Variable Costs, Service Setting Louise McDermott, controller for the Galvin plant of Veromar Inc., wanted to determine the cost behavior of moving materials throughout the plant. She accumulated the following data on the number of moves (from 100 to 800 in increments of 100) and the total cost of moving materials at those levels of moves: Required: 1. Prepare a scattergraph based on these data. Use cost for the vertical axis and number of moves for the horizontal axis. Based on an examination of the scattergraph, does there appear to be a linear relationship between the total cost of moving materials and the number of moves? 2. Compute the cost formula for moving materials by using the high-low method. Calculate the predicted cost for a month with 550 moves by using the high-low formula. (Note: Round the answer for the variable rate to three decimal places and the answer for total fixed cost and total cost to the nearest dollar.) 3. CONCEPTUAL CONNECTION Compute the cost formula for moving materials using the method of least squares. (Note: For the method of least squares, round the variable rate to two decimal places and total fixed cost and total cost to the nearest dollar.) Using the regression cost formula, what is the predicted cost for a month with 550 moves? What does the coefficient of determination tell you about the cost formula computed by regression? 4. CONCEPTUAL CONNECTION Evaluate the cost formula using the least squares coefficients. Could it be improved? Try dropping the third data point (300, 3,400), and rerun the regression.arrow_forwardVariable and Fixed Costs What follows are a number of resources that are used by a manufacturer of futons. Assume that the output measure or cost driver is the number of futons produced. All direct labor is paid on an hourly basis, and hours worked can be easily changed by management. All other factory workers are salaried. a. Power to operate a drill (to drill holes in the wooden frames of the futons) b. Cloth to cover the futon mattress c. Salary of the factory receptionist d. Cost of food and decorations for the annual Fourth of July party for all factory employees e. Fuel for a forklift used to move materials in a factory f. Depreciation on the factory g. Depreciation on a forklift used to move partially completed goods h. Wages paid to workers who assemble the futon frame i. Wages paid to workers who maintain the factory equipment j. Cloth rags used to wipe the excess stain off the wooden frames Required: Classify the resource costs as variable or fixed.arrow_forward
- Identification of variable, semi-variable, and fixed costs.*Provide total VC/unit, total FC, and Semi-VC here as well. q 1. Breakeven in units. q 2. Breakeven in Sales q 3. Units including Target profit q 4. Income statement as at Dec.31, 202x V&A Carpet cleaning (Finney Franchise) based on units from Q3 with target profitarrow_forwardThe internal manufacturing cost per unit of a component is as follows – Direct Material $5.00 Direct Labour $10.00 Fixed costs $15.00 Total costs $30.00 (a) Given the information above, if the company buys the component, it would however have to pay $17.00, but would still have to meet its fixed cost. Should the company make or buy the component? (b) Based on your answer in (a) above name two factors that can influence the company to buy the product. 2. (a) Describe two (2) methods for allocating support costs to departments. (b) Explain why support costs are allocated to departments. Please answer question 2 thank you very much.arrow_forwardThe internal manufacturing cost per unit of a component is as follows – Direct Material $5.00 Direct Labour $10.00 Fixed costs $15.00 Total costs $30.00 (a) Given the information above, if the company buys the component, it would however have to pay $17.00, but would still have to meet its fixed cost. Should the company make or buy the component? (b) Based on your answer in (a) above name two factors that can influence the company to buy the product. 2. (a) Describe two (2) methods for allocating support costs to departments. (b) Explain why support costs are allocated to departments.arrow_forward
- Question-1 The table below shows the short run cost for producing bicycles. Complete all missing values in table below: Marginal cost Average total cost Average variable cost Average fixed cost Total cost Variable cost Fixed cost Output Labor 0 $60 0 0 70$ $60 1 1 $140 $60 6 2 $210 $60 11 3 280$ $60 15 4 $350 $60 13 5 $420 $60 12 6 Draw the short run total cost curve (show the total cost, fixed cost, variable cost). Where the marginal cost and average total cost intercept? Explain the relationship between the marginal cost and the average total cost with the help of graph. How much output should Sindbad produce to maximize his profit, if the market price is equal to $11? How much profit (loss) will he earn? Indicate the…arrow_forwardINSTRUCTIONS: Putting an X in the appropriate spot, classify the costs as: Direct Material, Direct Labor, Overhead, or Period Costs. The Fixed and Variable cost classifications have been provided for you. Item/Cost DirectMaterial DirectLabor Overhead Period Costs Fixed Variable Salary - Collar maker x Salary - Leash maker x Salary - Harness maker x Salary - Receptionist High-tensile strength nylon webbing x Polyester/nylon ribbons x Buckles made of cast hardware x Depreciation on sewing machines x Rent x Utilities and insurance x Scissors, thread, and cording x Price tags x…arrow_forwardCost Relationships The following costs are for Optical View Inc., a contact lens manufacturer:Output in Units Fixed Costs Variable Costs Total Costs250 $4,750 $ 7,500 $12,250 300 4,750 9,000 13,750350 4,750 10,500 15,250400 4,750 12,000 16,750Required1. Calculate and graph total costs, total variable cost, and total fixed cost.2. For each level of output calculate the per-unit total cost, per-unit variable cost, and per-unit fixed cost.3. Using the results from requirement 2, graph the per-unit total cost, per-unit variable cost, and per-unitfixed cost, and discuss the behavior of the per-unit costs over the given output levels.arrow_forward
- 1. What type of cost includes product ingredients and materials? a. fixed c. total b. revenue d. variable 2. What type of cost includes the rental of space? a. fixed c. total b. revenue d. variable 3. What type of cost is the product of the price and the quantity sold? a. fixed c. total b. revenue d. variable 4. What concept is being described when the business will neither earn a profit nor suffer a loss? a. break-even c. profit b. loss d. summit 5. What type of analysis shows equal revenue and total cost? a. break-even c. profit-loss b. cost of variable d. volume of sales Read the selection for questions 6-10. Junedyl is planning to run a coffee shop where he plans to sell each cup of coffee at 50.00. The ₱ fixed cost that is amounting to 40,000.00 includes all his expenses for the rent, wages, basic needs and others. ₱ So even if Junedyl will not be able to sell, he is still obliged to pay this amount. If it costs Junedyl an average of 10.00 for every cup of coffee which is allotted…arrow_forwardRequired : i) List the alternatives facing Zee Manufacturing with respect to production of component S6 . ii) List the relevant costs for each alternative if Zee decides to purchase the component from Bryan . Predict whether the operating income will increase or decrease and better alternatives . b) Refer to the information for Zee Manufacturing above . Assume that 75 % of Zee Manufacturing's fixed overhead for component S6 would be eliminated if that component were no longer produced . Required : If Zee decides to purchase the component from Bryan , predict whether the operating income will increase or decrease and propose the better alternatives .arrow_forwardQuestion Content Area If variable manufacturing costs are $18 per unit and total fixed manufacturing costs are $542,700, what is the manufacturing cost per unit if: a. 6,700 units are manufactured and the company uses the variable costing concept?$fill in the blank 1 b. 8,100 units are manufactured and the company uses the variable costing concept?$fill in the blank 2 c. 6,700 units are manufactured and the company uses the absorption costing concept?$fill in the blank 3 d. 8,100 units are manufactured and the company uses the absorption costing concept?$fill in the blank 4arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Managerial Accounting: The Cornerstone of Busines...AccountingISBN:9781337115773Author:Maryanne M. Mowen, Don R. Hansen, Dan L. HeitgerPublisher:Cengage Learning
Managerial Accounting: The Cornerstone of Busines...
Accounting
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Cengage Learning
Cost Accounting - Definition, Purpose, Types, How it Works?; Author: WallStreetMojo;https://www.youtube.com/watch?v=AwrwUf8vYEY;License: Standard YouTube License, CC-BY