BuyFindarrow_forward

Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
ISBN: 9781337115773

Solutions

Chapter
Section
BuyFindarrow_forward

Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
ISBN: 9781337115773
Textbook Problem
1 views

Cost Behavior, Classification

Smith Concrete Company owns enough ready-mix trucks to deliver up to 100,000 cubic yards of concrete per year (considering each truck’s capacity, weather, and distance to each job). Total truck depreciation is $200,000 per year. Raw materials (cement, gravel, and so on) cost about $25 per cubic yard of cement.

Required:

  1. 1. Prepare a graph for truck depreciation. Use the vertical axis for depreciation cost and the horizontal axis for cubic yards of cement.
  2. 2. Prepare a graph for raw materials. Use the vertical axis for cost and the horizontal axis for cubic yards of cement.
  3. 3. Assume that the normal operating range for the company is 90,000 to 96,000 cubic yards per year. Classify truck depreciation and raw materials as variable or fixed costs.
  4. 4. CONCEPTUAL CONNECTION Briefly describe actions that Smith management could take to reduce the truck depreciation cost from year to year.
  5. 5. CONCEPTUAL CONNECTION Briefly describe actions that Smith management could take to reduce the total raw materials cost from year to year.

1.

To determine

Construct the graph for truck depreciation.

Explanation

Cost:

Cost can be defined as the cash and cash equivalent which is incurred against the products or its related services which will benefit the organization in the future. There are two types of costs that are fixed and variable costs.

The graphical representation of truck depreciation:

2.

To determine

Construct the graph for raw materials.

3.

To determine

Categorize the truck depreciation and raw materials as a variable cost and fixed cost.

4.

To determine

Explain the factors that should be taken by SM management to reduce depreciation of truck.

5.

To determine

Explain the factors that SM management should take to reduce the cost of raw materials.

Still sussing out bartleby?

Check out a sample textbook solution.

See a sample solution

The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started

Additional Business Solutions

Find more solutions based on key concepts

Show solutions add

(Oligopoly Power) What are three sources of oligopolies?

ECON: MICRO4 (New, Engaging Titles from 4LTR Press)

Describe the four sources of funds for a business.

Foundations of Business (MindTap Course List)

Why do executives and managers spend more time listening than do workers?

Essentials of Business Communication (MindTap Course List)

TIME VALUE OF MONEY ANALYSIS You have applied for a job with a local bank. As part of its evaluation process, y...

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)

What are the three steps in decision making?

Pkg Acc Infor Systems MS VISIO CD