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

The following cost formula for total purchasing cost in a factory was developed using monthly data.

Total Cost = $ 235 , 000 + ( $ 75 × Number of Purchase Orders )

Next month, 8,000 purchase orders are predicted. The total cost predicted for the purchasing department next month

  1. a. is $8,000.
  2. b. is $235,000.
  3. c. is $600,000.
  4. d. is $835,000.
  5. e. cannot be determined from the above formula.

To determine

Identify total cost anticipated for the purchasing department in the next month.

Explanation

Fixed Cost:

Fixed cost is the cost which is not affected by the change in level of output. It remains unchanged in the short run, for example, property taxes, rent and salaries.

d.

Use the following formula to calculate the estimated total cost for next month:

Totalcost=(Fixed cost+(Variable cost× Number of purchase order))=($235,000+($75<

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

What does the invisible hand of the marketplace do?

Essentials of Economics (MindTap Course List)

NONCONSTANT GROWTH Assume that it is now January 1, 2015. Wayne-Martin Electric Inc. (WME) has developed a sola...

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