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Cornerstones of Cost Accounting 1st Edition by Don Hansen,Maryanne Mowen
Edition 1ISBN: 978-0538736787Cornerstones of Cost Accounting 1st Edition by Don Hansen,Maryanne Mowen
Edition 1ISBN: 978-0538736787 Exercise 14
COST BEHAVIOR
BBQ Biff, Inc., manufactures barbeque smokers. Based on past experience, BBQ Biff has found that its total annual overhead costs can be represented by the following formula: Overhead cost = $720,000 + $0.90X, where X equals number of smokers. Last year, BBQ Biff produced 25,000 smokers. Actual overhead costs for the year were as expected.
Required:
1. What is the driver for the overhead activity?
2. What is the total overhead cost incurred by BBQ Biff last year?
3. What is the total fixed overhead cost incurred by BBQ Biff last year?
4. What is the total variable overhead cost incurred by BBQ Biff last year?
5. What is the overhead cost per unit produced?
6. What is the fixed overhead cost per unit?
7. What is the variable overhead cost per unit?
8. Recalculate Requirements 5, 6, and 7 for the following levels of production: (a) 22,000 units and (b) 27,000 units. (Round your answers to the nearest cent.) Explain this outcome.
BBQ Biff, Inc., manufactures barbeque smokers. Based on past experience, BBQ Biff has found that its total annual overhead costs can be represented by the following formula: Overhead cost = $720,000 + $0.90X, where X equals number of smokers. Last year, BBQ Biff produced 25,000 smokers. Actual overhead costs for the year were as expected.
Required:
1. What is the driver for the overhead activity?
2. What is the total overhead cost incurred by BBQ Biff last year?
3. What is the total fixed overhead cost incurred by BBQ Biff last year?
4. What is the total variable overhead cost incurred by BBQ Biff last year?
5. What is the overhead cost per unit produced?
6. What is the fixed overhead cost per unit?
7. What is the variable overhead cost per unit?
8. Recalculate Requirements 5, 6, and 7 for the following levels of production: (a) 22,000 units and (b) 27,000 units. (Round your answers to the nearest cent.) Explain this outcome.
Explanation
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Verified
1. The driver for the overhead activity ...
Cornerstones of Cost Accounting 1st Edition by Don Hansen,Maryanne Mowen
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