Managerial Accounting: Creating Value in a Dynamic Business Environment
12th Edition
ISBN: 9781260417074
Author: HILTON, Ronald
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Chapter 8, Problem 37P
1.
To determine
Compute the company’s total cost of company E for the current year.
2.
To determine
Identify the amount of cost that would be held in year-end inventory under (a) absorption costing and (b) variable costing.
3.
To determine
Identify the amount of company’s total cost for the year that would be included as an expense on the period’s income statement under (a) absorption costing and (b) variable costing.
4.
To determine
Prepare an excel sheet and solve the given calculations, assume that the direct-material cost is
$11 per unit and the total direct-labor cost is $46,000.
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Students have asked these similar questions
A company has a linear total cost function and has determined that over the next three months it can produce12,000 units at a total cost of $224; 000. This same manufacturer can produce 18,000 units at a total cost of$296; 000. The selling price per unit is $13.25.i. Determine the revenue, cost and pro t functions using q for number of units.ii. What is the xed cost ?iii. What is the marginal cost ?iv. Find the break-even quantity.v. What is the break-even dollar volume of sale ?vi. What will pro t be if the company shuts down operation?vii. If, because of a strike, the company will be able to produce only 10,000 units, should it shut down for the nextthree months ? why or why not ?
2. What is the expected contribution margin ratio? Round to the nearest whole percent.
3. Determine the break-even sales in units and dollars.
Units
units
Dollars
4. Construct a cost-volume-profit chart on your own paper. What is the break-even sales?
2$
5. What is the expected margin of safety in dollars and as a percentage of sales?
Dollars:
Percentage: (Round to the nearest whole percent.)
%
6. Determine the operating leverage. Round to one decimal place.
Abdulwahab Corporation is estimating the cost function for total cost of production of product A using the high-low method. The data collected for the past year is as following:
Number of units Total
Quarter produced Costs
1 4,000 $ 1,000
2 5,400 1,280
3 7,000 1,600
4 9,000 2,000
Calculate the following amounts:
The variable cost per unit
The fixed cost
Explain the method used by the company to estimate the cost function. Suggest other methods than may be used to estimate cost function.
Chapter 8 Solutions
Managerial Accounting: Creating Value in a Dynamic Business Environment
Ch. 8 - Briefly explain the difference between absorption...Ch. 8 - Timing is the key in distinguishing between...Ch. 8 - The term direct costing is a misnomer. Variable...Ch. 8 - When inventory increases, will absorption-costing...Ch. 8 - Why do many managers prefer variable costing over...Ch. 8 - Explain why some management accountants believe...Ch. 8 - Prob. 7RQCh. 8 - Why do proponents of absorption costing argue that...Ch. 8 - Why do proponents of variable costing prefer...Ch. 8 - Which is more consistent with cost-volume-profit...
Ch. 8 - Explain how the accounting definition of an asset...Ch. 8 - List and define four types of product quality...Ch. 8 - Explain the difference between observable and...Ch. 8 - Prob. 14RQCh. 8 - What is meant by a products grade, as a...Ch. 8 - Prob. 16RQCh. 8 - Prob. 17RQCh. 8 - Explain three strategies of environmental cost...Ch. 8 - Prob. 19RQCh. 8 - Manta Ray Company manufactures diving masks with a...Ch. 8 - Information taken from Tuscarora Paper Companys...Ch. 8 - Easton Pump Companys planned production for the...Ch. 8 - Pandora Pillow Companys planned production for the...Ch. 8 - Bianca Bicycle Company manufactures mountain bikes...Ch. 8 - Refer to the data given in the preceding exercise...Ch. 8 - Prob. 26ECh. 8 - Prob. 27ECh. 8 - The following costs were incurred by Osaka Metals...Ch. 8 - San Mateo Circuitry manufactures electrical...Ch. 8 - Prob. 31ECh. 8 - Skinny Dippers, Inc. produces nonfat frozen...Ch. 8 - Yellowstone Company began operations on January 1...Ch. 8 - Outback Corporation manufactures tactical LED...Ch. 8 - Great Outdoze Company manufactures sleeping bags,...Ch. 8 - Dayton Lighting Company had operating income for...Ch. 8 - Prob. 37PCh. 8 - Chataqua Can Company manufactures metal cans used...Ch. 8 - Advanced Technologies (AT) produces two...Ch. 8 - Laser News Technology, Inc. manufactures...Ch. 8 - Prob. 42CCh. 8 - Refer to the information given in the preceding...Ch. 8 - Prob. 44C
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