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Using High-Low to Calculate Predicted Total Variable Cost and Total Cost for Budgeted Output
Refer to the information for Pizza Vesuvio on the previous page. Assume that this information was used to construct the following formula for monthly labor cost.
Required:
Assume that 675 employee hours are budgeted for the month of September. Use the total labor cost formula for the following calculations:
- 1. Calculate total variable labor cost for September.
- 2. Calculate total labor cost for September.
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Chapter 3 Solutions
Bundle: Managerial Accounting: The Cornerstone of Business Decision-Making, Loose-Leaf Version, 7th + CengageNOWv2, 1 term (6 months) Printed Access Card
- Using High-Low to Calculate Predicted Total Variable Cost and Total Cost for a Time Period That Differs from the Data Period Refer to the information for Pizza Vesuvio on the previous page. Assume that this information was used to construct the following formula for monthly labor cost. TotalLaborCost=5,237+(7.40EmployeeHours) Required: Assume that 4,000 employee hours are budgeted for the coming year. Use the total labor cost formula to make the following calculations: 1. Calculate total variable labor cost for the year. 2. Calculate total fixed labor cost for the year. 3. Calculate total labor cost for the coming year. Use the following information for Brief Exercises 3-17 through 3-20: Pizza Vesuvio makes specialty pizzas. Data for the past 8 months were collected:arrow_forwardUsing High-Low to Calculate Predicted Total Variable Cost and Total Cost for Budgeted Output Refer to the information for Speedy Petes above. Assume that this information was used to construct the following formula for monthly delivery cost. TotalDeliveryCost=41,850+(12.00NumberofDeliveries) Required: Assume that 3,000 deliveries are budgeted for the following month of January. Use the total delivery cost formula for the following calculations: 1. Calculate total variable delivery cost for January. 2. Calculate total delivery cost for January.arrow_forwardMethod of Least Squares, Predicting Cost for Different Time Periods from the One Used to Develop a Cost Formula Refer to the information for Farnsworth Company on the previous page. However, assume that Tracy has used the method of least squares on the receiving data and has gotten the following results: Required: 1. Using the results from the method of least squares, prepare a cost formula for the receiving activity. 2. Using the formula from Requirement 1, what is the predicted cost of receiving for a month in which 1,450 receiving orders are processed? (Note: Round your answer to the nearest dollar.) 3. Prepare a cost formula for the receiving activity for a quarter. Based on this formula, what is the predicted cost of receiving for a quarter in which 4,650 receiving orders are anticipated? Prepare a cost formula for the receiving activity for a year. Based on this formula, what is the predicted cost of receiving for a year in which 18,000 receiving orders are anticipated?arrow_forward
- Using Regression to Calculate Fixed Cost, Calculate the Variable Rate, Construct a Cost Formula, and Determine Budgeted Cost Refer to the information for Speedy Petes on the previous page. Coefficients shown by a regression program for Speedy Petes data are: Required: Use the results of regression to make the following calculations: 1. Calculate the fixed cost of deliveries and the variable rate per delivery. 2. Construct the cost formula for total delivery cost. 3. Calculate the budgeted cost for next month, assuming that 3,000 deliveries are budgeted. (Note: Round answers to the nearest dollar.) Use the following information for Brief Exercises 3-26 through 3-29: Speedy Petes is a small start-up company that delivers high-end coffee drinks to large metropolitan office buildings via a cutting-edge motorized coffee cart to compete with other premium coffee shops. Data for the past 8 months were collected as follows:arrow_forwardZinc Company constructed the following formula for its monthly utility cost: Total utility cost = $1,000 + ($5 × Number of labor hours) Assume that 500 labor hours are budgeted for the month of April. Calculate the total utility cost for the month of April.arrow_forwardBotana Company constructed the following formula for its monthly utility cost. Total utility cost = $1,200 + ($8.10 × Labor hours) Assume that 775 labor hours are budgeted for the month of April. If Botana Company incurs 9,600 labor hours for the year, what would be the estimate of total utility cost?arrow_forward
- Interpreting Cost Formula Wylie Enterprises' controller, Josh Senior, estimated the following formula, based on monthly data, for total overhead cost: Overhead costs = $173,500+ ($43.50 x Direct labor hours) Required 1) Link each term in Column A to the corresponding term in Column B Column B Column A Overhead cost $173,500 $43.50 Direct labor hours 2) If next month's budgeted direct labor hours equal 8,000, and are within the relevant range, what is the budgeted overhead cost? $0 → ◆ 3) If next quarter's budgeted direct labor hours equal 26,000, and are within the relevant range, what is the budgeted overhead cost? $0 4) If next year's budgeted direct labor hours equal 101,250, and are within the relevant range, what is the budgeted overhead cost? $0arrow_forwardKerekes Manufacturing Corporation has prepared the following overhead budget for next month. Activity level 2,200 machine-hours Variable overhead costs: Supplies Indirect labor Fixed overhead costs: Supervision Utilities Depreciation Total overhead cost Multiple Choice The company's variable overhead costs are driven by machine-hours. What would be the total budgeted overhead cost for next month if the activity level is 2,100 machine-hours rather than 2,200 machine-hours? (Round your intermediate calculations to 2 decimal places.) O $54,560 $53,330 $52,770 $ 9,240 17,820 $52,080 15,300 5,600 6,600 $ 54,560arrow_forwardAero Travel Trailer Manufacturing is working on budgeting utility cost. The controller has decided that utilities are a function of the hours worked during the month. The following information is available and representative of the company’s utility costs: - Hours worked Utility cost incurred Low point 1,300 $ 903 High point 1,680 1,074 If 1,425 hours are worked in a month, total utility cost (rounded to the nearest dollar) using the high-low method should be Group of answer choices $947. $959. $954. $976.arrow_forward
- Veritas Company constructed the following formula for its monthly utility cost. Total utility cost $2,100 + ($5.50 x Labor hours) Assume that 557 labor hours are budgeted for the month of April. If Botana Company incurs 12,600 labor hours for the year, what would be the estimate of total utility cost for the year?arrow_forwardUsing High-Low to Calculate Predicted Total Variable Cost and Total Cost for Budgeted Output Pizza Vesuvio makes specialty pizzas. Data for the past eight months were collected: Month Labour Cost ($) Employee Hours January $7,300 February $8,440 March $10,199 April $10,087 May $8,790 June $7,750 July $9,790 August $7,831 Assume that this information was used to construct the following formula for monthly labour cost. Total Labour Cost = $4,319 + ($8.28 x Employee Hours) 410 600 710 660 530 400 620 360 Required: Assume that 695 employee hours are budgeted for the month of September. Use the total labour cost formula for the following calculations: 1. Calculate total variable labour cost for September. Round your answer to nearest dollar. 2. Calculate total labour cost for September. Round your answer to nearest dollar.arrow_forwardRequired: a) Using Activity Based Costing, calculate the rate for each cost driver. b) Using activity based budgeting, prepare a budgeted yearly operating statement for Aero3D Ltd. Show the following separately, within the statement. i. The budgeted output for each product per year; ii. The contribution to profits for each product and in total before charging activity based costs; iii. The profit for each product and in total after charging activity based costs but before charging core costs (non-activity based costs); iv. The total profit after charging core based costs.arrow_forward
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