Concept explainers
1.
To classify: The given cost of $179,750 per hour as fixed, variable, or mixed cost.
2.
To provide: The estimate regarding the costs that might be included in $179,750 per hour cost estimate.
3.
To classify: The cost listed above as fixed, variable or mixed cost.
4.
To explain: The usefulness of the cost per hour when the number of trips taken by the president in any given year fluctuates and is dependent on the political climate, crises, economics, and the like.
5.
To explain: The purpose for which the cost per hour of $179,750 can be used and the purposes for which this cost is not a true cost representative.
6.
To provide: The way other than the given way to represent/communicate the cost of Air Force One.
7.
To conclude: Whether the reimbursement policy is fair to the president or not.
8.
To conclude: Whether the reimbursement policy is fair to the taxpayers or not.
Want to see the full answer?
Check out a sample textbook solutionChapter 6 Solutions
Managerial Accounting, Student Value Edition (5th Edition)
- Learning Task 2 Problem: The Prospere Bookstore The Prospere Bookstore sells the books used in classed such as workbooks and coloring books. All the enrolled learners (150 learners) purchased the 3 prescribed books at P500 each. The books costs P200 each. Also, sales of various school supplies amounted to P500,000. Costs of these school supplies amounted to P250,000. The monthly salary of the bookstore manager is P20,000. The store is manned by one clerk with monthly salary of P6,000. Utilities expense for the year totals P80,000. Of this, 25% is for the small office at the back of the bookstore. Depreciation for store fixtures amounted to P50,000. Requirement: Prepare the multi-step income for the year ended December 31 for Prospere Bookstore.arrow_forward(J) Citations are required for this exercise. Comments to other students must be detailed and substantive. Alpaca Industries, located in the beauty pacific Northwest, manufactures a household electronic device. The company is fairly small with revenues and total assets of approximately $370,000 and $300,000, respectively. The company has never maintained a budget since its inception, and as a new hire, you are eager to create a budget for the company. Write a 1-page memo, explaining to the owner the advantages of budgeting. In your memo, provide exact page number citations. Please note that any responses without citations will not be graded. Only the original responses are graded; subsequent edits are not graded.arrow_forwardCost estimation, cumulative average-time learning curve. The Pacic Boat Company, which is under contract to the U.S. Navy, assembles troop deployment boats. As part of its research program, it completes the assembly of the rst of a new model (PT109) of deployment boats. The Navy is impressed with the PT109. It requests that Pacic Boat submit a proposalon the cost of producing another six PT109s. Pacic Boat reports the following cost information for the rst PT109 assembled and uses a 90% cumulative average-time learning model as a basis for forecasting direct manufacturing laborhours for the next six PT109s. (A 90% learning curve means b = −0.152004.)arrow_forward
- Bellevie college cost $7612.00 a year, the graduation rate is 25%, salary after attending is $42,400. Edmonds college cost $7,207.00 a year, the graduation rate is 27%, salary after attending is $34,300. What is the explanatory? What is the responsearrow_forwardPlease step by step process. Professor von Nordenflycht presents Dean Kayande with two new proposals for offering a graduate certificate program. Both programs will cost $60,000, for classroom and instructor time. Both programs are projected to have two possible revenue outcomes. Program 1, which focuses on accounting, is projected to have a 50% chance of generating $150,000 in revenue and a 50% chance of generating $100,000 in revenue. Project 2, which focuses on cryptocurrencies, is predicted to have a 62.5% chance of generating $200,000 in revenue or, otherwise, generating no revenue! a. What is the expected value of each program? b. What is the variance of each program?arrow_forwardCost estimation, cumulative average-time learning curve. The Pacific Boat Company, which is under contract to the U.S. Navy, assembles troop deployment boats. As part of its research program, it completes the assembly of the first of a new model (PT109) of deployment boats. The Navy is impressed with the PT109. It requests that Pacific Boat submit a proposal on the cost of producing another six PT109s. Pacific Boat reports the following cost information for the first PT109 assembled and uses a 90% cumulative average-time learning model as a basis for forecasting direct manufacturing labor-hours for the next six PT109s. (A 90% learning curve means b = −0.152004.)arrow_forward
- Eric Krassow's firm is about to bid on a new radar system. Although the product uses new technology, Krassow believes that a learning rate of 75% is appropriate. The first unit is expected to take 700 hours, and the contract is for 40 units. What is the total amount of hours to build the 40 units?arrow_forwardThe Happy Toddlers (THT) is a preparatory school for children three to five years old. There are ten teachers employed by THT: five senior teachers with a salary of P30,000 a month and five junior teachers at P18,000 a month. There are also four administrators with average monthly salary of P35,000. Annual depreciation for furniture and fixtures amounted to P100,000. Utilities starting operation totals P200,000. Required:Examine and list down the expenses of THT as of December 31 by nature. Which type of expense is the highest and lowest? If the owner of THT consulted you on minimizing expenses and maximizing profit, what would you recommend?arrow_forwardThe Happy Toddlers (THT) is a preparatory school for children three to five years old. There are ten teachers employed by THT: five senior teachers with a salary of P30,000 a month and five junior teachers at P18,000 a month. There are also four administrators with average monthly salary of P35,000. Annual depreciation for furniture and fixtures amounted to P100,000. Utilities starting operation totals P200,000.Required:Examine and list down the expenses of THT as of December 31 by nature. Which type of expense is the highest and lowest?If the owner of THT consulted you on minimizing expenses and maximizing profit, what would you recommend?arrow_forward
- Parokya ni Edgar Band will perform at the Eastern Visayas State University soccer field (2,500-person capacity) on February 12, 2021 during the Foundation Day Celebration of the University. The school administration has approached the Junior Philippine Institute of Accountants (JPIA) to take charge of the said event. The university will be charging JPIA for ₱120,000 for the facilities and ₱8 for each ticket sold. The organization asks you, as a member of JPIA to determine how much to charge for each ticket. The JPIA organization wants to make a profit of ₱40 per ticket sold. You assume that 1,500 tickets will be sold. a. What is the total cost of the organization if 1,500 tickets are sold? b. What price per ticket must be charged for JPIA to earn its desired profit margin? c. Suppose that on February 12, 2021, a major typhoon hit the area, bringing in two meters height of flood. Only 500 tickets are sold because most students were going to buy their tickets at the entrance of the…arrow_forwardStudent question MBI is a manufacturer of personal computers. All its personal computers use a 3.5-inch high-density floppy disk drive which it purchases from Ynos. MBI operates its factory 52 weeks per year, which requires assembling 100 of these floppy disk drives into computers per week. MBI’s annual holding cost rate is 20 percent of the value (based on purchase cost) of the inventory. Regardless of order size, the administrative cost of placing an order with Ynos has been estimated to be $50. A quantity discount is offered by Ynos for large orders as shown below, where the price for each category applies to every disk drive purchased. Determine the optimal order quantity according to the EOQ model with quantity discounts. What is the resulting total cost per year? What is the resulting total cost per year?arrow_forwardSocial Media, Inc. (SMI) has two services for users. Toot!, which connects tutors with students who are looking for tutoring services, and TIX, which can be used to buy, sell, or exchange event tickets. For the following year, SMI expects the following results. Toot! Tix Total Users 15,500 22,100 37,600 Revenues $2,000,000 $2,080,000 $4,080,000 Engineering hours 10,4000 8,400 18,800 Engineering cost $ 881,000 $ 999,000 $1,880,000 Administrative costs…arrow_forward
- Cornerstones of Cost Management (Cornerstones Ser...AccountingISBN:9781305970663Author:Don R. Hansen, Maryanne M. MowenPublisher:Cengage Learning