NEW MyLab Accounting with Pearson eText -- Access Card -- for Cost Accounting
15th Edition
ISBN: 9780133451474
Author: Charles T. Horngren, Srikant M. Datar, Madhav V. Rajan
Publisher: PEARSON
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Chapter 2, Problem 2.21E
Variable costs, fixed costs, total costs. Bridget Ashton is getting ready to open a small restaurant. She is on a tight budget and must choose between the following long-distance phone plans:
Plan A: Pay 10 cents per minute of long-distance calling.
Plan B: Pay a fixed monthly fee of $15 for up to 240 long-distance minutes and 8 cents per minute thereafter (if she uses fewer than 240 minutes in any month, she still pays $15 for the month).
Plan C: Pay a fixed monthly fee of $22 for up to 510 long-distance minutes and 5 cents per minute thereafter (if she uses fewer than 510 minutes, she still pays $22 for the month).
- 1. Draw a graph of the total monthly costs of the three plans for different levels of monthly long-distance calling.
Required
- 2. Which plan should Ashton choose if she expects to make 100 minutes of long-distance calls? 240 minutes? 540 minutes?
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Students have asked these similar questions
Variable costs, fixed costs, total costs. Bridget Ashton is getting ready to open a small restaurant. She is on a tight budget and must choose between the following long-distance phone plans:
Plan A: Pay 10 cents per minute of long-distance calling.
Plan B: Pay a fixed monthly fee of $15 for up to 240 long-distance minutes and 8 cents per minute thereafter (if she uses fewer than 240 minutes in any month, she still pays $15 for the month).
Plan C: Pay a fixed monthly fee of $22 for up to 510 long-distance minutes and 5 cents per minute thereafter (if she uses fewer than 510 minutes, she still pays $22 for the month).
Draw a graph of the total monthly costs of the three plans for different levels of monthly long-distance calling.
Which plan should Ashton choose if she expects to make 100 minutes of long-distance calls? 240 minutes? 540 minutes?
Bridget Cheungis getting ready to open a small restaurant. She is on a tight budget and must choose between the following long-
Plan A:
Pay
$0.07
per minute of long-distance calling.
Plan B:
Pay a fixed monthly fee of
$14
for up to
280
long-distance minutes and
$0.05
per minute thereafter (if she uses fewer than
280
minutes in any month, she still pays
$14
for the month).
Plan C:
Pay a fixed monthly fee of
$23
for up to
440
long-distance minutes and
$0.04
per minute thereafter (if she uses fewer than
440
minutes, she still pays
$23
for the month).
1.
Match the graphs to the total monthly costs of the three plans for different levels of monthly long-distance calling.
2.
Which plan should
Cheung
choose if she expects to make 100 minutes of long-distance calls?
280
minutes?
480
minutes?
Requirement 1. Match the graphs to the total monthly costs of the three plans for different levels of monthly long-distance calling.
Before we…
Owner Shirl Low
is considering franchising her Noodles by Low
restaurant concept. She believes people will pay $ 5.00
for a large bowl of noodles. Variable costs are $ 2.00
per bowl. Low
estimates monthly fixed costs for a franchise at $ 3000
Chapter 2 Solutions
NEW MyLab Accounting with Pearson eText -- Access Card -- for Cost Accounting
Ch. 2 - Define cost object and give three examples.Ch. 2 - Define direct costs and indirect costs.Ch. 2 - Prob. 2.3QCh. 2 - Name three factors that will affect the...Ch. 2 - Define variable cost and fixed cost. Give an...Ch. 2 - What is a cost driver? Give one example.Ch. 2 - What is the relevant range? What role does the...Ch. 2 - Explain why unit costs must often be interpreted...Ch. 2 - Prob. 2.9QCh. 2 - What are three different types of inventory that...
Ch. 2 - Distinguish between inventoriable costs and period...Ch. 2 - Define the following: direct material costs,...Ch. 2 - Describe the overtime-premium and idle-time...Ch. 2 - Define product cost. Describe three different...Ch. 2 - What are three common features of cost accounting...Ch. 2 - Prob. 2.16ECh. 2 - Prob. 2.17ECh. 2 - Classification of costs, service sector. Market...Ch. 2 - Classification of costs, merchandising sector....Ch. 2 - Prob. 2.20ECh. 2 - Variable costs, fixed costs, total costs. Bridget...Ch. 2 - Prob. 2.22ECh. 2 - Prob. 2.23ECh. 2 - Prob. 2.24ECh. 2 - Cost drivers and functions. The representative...Ch. 2 - Prob. 2.26ECh. 2 - Total and unit cost, decision making. Gayles...Ch. 2 - Prob. 2.28ECh. 2 - Prob. 2.29PCh. 2 - Prob. 2.30PCh. 2 - Prob. 2.31PCh. 2 - Prob. 2.32PCh. 2 - Prob. 2.33PCh. 2 - Prob. 2.34PCh. 2 - Prob. 2.35PCh. 2 - Prob. 2.36PCh. 2 - Prob. 2.37PCh. 2 - Prob. 2.38PCh. 2 - Prob. 2.39PCh. 2 - Prob. 2.40PCh. 2 - Prob. 2.41PCh. 2 - Prob. 2.42P
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