Figure 3-3. Okafor Company manufactures skis. The management accountant wants to
ID: 2335553 • Letter: F
Question
Figure 3-3. Okafor Company manufactures skis. The management accountant wants to calculate the fixed and variable costs associated with the leasing of machinery. Data for the past four months were collected. Machine Lease cost hours
Month Lease cost Machine hours
April $21,000 550
May $16,500 420
June $19,000 510
July $22,230 570
1 Refer to Figure 3-3. Using the high-low method calculate the variable rate for the lease cost
a. $38.18
b. $38.20
c. $61.50
d. $37.25 2.
Refer to Figure 3-3. Using the high-low method calculate the fixed cost of leasing
a. $482
b. $516
c. $420
d. $456
3. Refer to Figure 3-3. What would Okafor Company's cost formula be to estimate the cost of leasing within the relevant range? a. total lease cost = $456 + ($38.20 × machine hours)
b. total lease cost = $516 + ($38.18 × machine hours)
c. total lease cost = $420 + ($37.25 × machine hours)
d. none of these are correct
4. Refer to Figure 3-3. What would the estimate of Okafor Company's total lease cost be at a level of 500 machine hours?
a. $19,606
b. $19,556
c. $16,464
d. $18,546
Figure 3-4. Botana Company constructed the following formula for monthly utility cost.
Total utility cost = $1,200 + ($8.10 × labor hours)
Assume that 775 labor hours are budgeted for the month of April.
5. Refer to Figure 3-4. Calculate the total variable utility cost for the month of April.
a. $1,200.00
b. $7,477.50
c. $6,277.50
d. $5,077.50 6.
Refer to Figure 3-4. Calculate the total utility cost for the month of April.
a. $7,477.50
b. $6,277.50
c. $1,200.00
d. $5,077.50 7.
Refer to Figure 3-4. If Botana Company incurs 9,600 labor hours for the year, what would be the estimate of total utility cost?
a. $76,560
b. $78,960
c. $92,160
d. none of these are correct
Figure 3-5. Maxwell Company makes treadmills. The company controller wants to calculate the fixed and variable costs associated with the janitorial costs incurred in the factory. Data for the past four months were collected.
Month Janitoral Cost Machine hours
September $11,000 575
October 11,400 610
November 10,200 510
December 10,725 550
8. Refer to Figure 3-5. Using the high-low method calculate the fixed cost of the janitorial services
a. $4,080
b. $7,320
c. $6,120
d. none of these are correct
9. Refer to Figure 3-5. What would Maxwell Company's estimate of total janitorial cost be at a level of 600 machine hours?
a. $11,280
b. $7,500
c. $4,080
d. $6,120
Figure 3-7. Margola Company produces hand-held calculators. The company controller wanted to calculate the fixed and variable costs associated with the maintenance cost incurred by the factory. Data for the past four months were collected.
Month Mainetnance Cost Machine hours
June $4,180 328
July 3,956 310
August 4,686 386
September 4,240 352
Coefficients shown by a regression program are: Intercept 1,150 X Variable 1 9.06 10.
Refer to Figure 3-7. Using the results of regression, calculate the fixed cost of maintenance.
a. $1,150.00
b. $978.37
c. $9.06
d. None of these are correct.
Explanation / Answer
1) Variable cost per unit : (22230-16500)/(570-420) (b) 38.2 2) Fixed cost of leasing : Total cost 16500 Less : variable cost (5730*38.2) -16044 14400 Fixed cost 456 4080 (d) is correct 3) What would Okafor Company's cost formula be to estimate the cost of leasing within the relevant range? (a) . total lease cost = $456 + ($38.20 × machine hours) 4) What would the estimate of Okafor Company's total lease cost be at a level of 500 machine hours? (b) $19,556 456+(38.2*500) Figure 3-4. Total utility cost = $1,200 + ($8.10 × labor hours) 5) Calculate the total variable utility cost for the month of April. 8.1*775 6277.5 Option © 6) Labour hours = 775 Total utility cost for month of april= 1200+(8.1*775) 7477.5 Option (a) 7) Labour hours = 9600 Total utility cost = 1200+(8.1*9600) 78960 Option (b) Figure 3-5 8) Variable cost per unit (11400-10200)/(610-510) 12 Fixed cost Total cost 11400 (-) Variable cost (1200*12) 7320.00 Option (a) 4080.00 9) total janitorial cost be at a level of 600 machine hours? Total cost = 4080+(600*12) 11280 Option (a) Figure 3-7 10) Using the results of regression, calculate the fixed cost of maintenance. The cost formula for maintenance was 1150+(9.06*machine hours) Here we want to find fixed cost : Variable cost per unit (4686-3956)/(386-310) 0 Fixed cost Total cost 4686 (-) Variable cost (386*9.6052) 3707.63 978.37 Option c is correct
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.