Question 1

Sustainable Solutions, Inc. incurred the following costs during the previous month:  Determine which of the costs in the table are variable, fixed or mixed and give an explanation for your classification for each cost.

Accepted Answer

The answer of Sustainable Solutions, Inc. incurred the following costs...

Question 2

Makito Manufacturers incurs the following costs in manufacturing computers. Match the cost driver with the related cost which would most likely cause the cost to change.
-Production workers Wages

Accepted Answer

The wages of production workers are most likely to change with the number of labor hours worked.

Question 3

Makito Manufacturers incurs the following costs in manufacturing computers. Match the cost driver with the related cost which would most likely cause the cost to change.
-Power Costs

Accepted Answer

Power costs are most likely to change with machine hours, as more machine usage typically results in higher power consumption.

Question 4

Makito Manufacturers incurs the following costs in manufacturing computers. Match the cost driver with the related cost which would most likely cause the cost to change.
-Computer chips, Memory boards, Keyboard assemblies

Accepted Answer

The costs of computer chips, memory boards, and keyboard assemblies are likely to change with the number of units produced, as these are variable costs directly related to production volume.

Question 5

Makito Manufacturers incurs the following costs in manufacturing computers. Match the cost driver with the related cost which would most likely cause the cost to change.
-Indirect production materials

Accepted Answer

Indirect production materials are likely to change with the number of units produced, as more materials are needed to produce more units.

Question 6

Makito Manufacturers incurs the following costs in manufacturing computers. Match the cost driver with the related cost which would most likely cause the cost to change.
-Indirect production labor wages

Accepted Answer

Indirect production labor wages are most likely to change with labor hours, as these wages are typically associated with the amount of time workers spend on production activities.

Question 7

You have recently decided to open a miniature golf course on a tract of land that you inherited. You have estimated that your monthly fixed costs will be $150 and your variable cost per customer will be $4. Prepare a graph showing your fixed cost line, total variable costs, and total cost line for 10 customers.

Accepted Answer

The answer of You have recently decided to open a...

Question 8

The finance manager has provided you with the following overhead cost function in a Y = m(X) + b format: Total monthly overhead costs = $2.50 (machine hours used) + $4,300. Given this cost function, identify the (a) variable cost; (b) the cost driver; (c) the fixed costs; and whether these monthly overhead costs are considered variable, fixed, or mixed in total.

Accepted Answer

The answer of The finance manager has provided you with...

Question 9

Ahmed Company had a high level of activity in June of 7,000 machine hours and related electrical costs of $20,000. In February had a month of low activity of 2,000 machine hours with electrical costs of $10,000. Using the high-low method, what are the variable cost per unit and the estimated fixed cost element of electrical costs?

Accepted Answer

The answer of Ahmed Company had a high level of...

Question 10

Sanchez Manufacturing Company collected the following production data for the past year:  If the high-low method is used, what is cost equation for the year?

Accepted Answer

The answer of Sanchez Manufacturing Company collected the following production...

Question 11

Nina and Marco having been working their accounting internship at Pino's Pizzeria. The owner of Pino's has provided them with the following information for the month of July, and has asked them to compute a cost equation for the pizzeria.

Accepted Answer

The answer of Nina and Marco having been working their...

Question 12

Brianna Wellington is the new accountant at Advanced Auto Corporation. She has been assigned the task of determining the next month's costs for her department. She only has partial information available from the previous month as follows: high activity level of 350 units at a total cost of $3,280. She also knows from the accounting records, that the total fixed costs are estimated at $970. Determine the amount of the variable cost per unit and the estimated total costs for next month assuming that 330 units are going to be produced.

Accepted Answer

The answer of Brianna Wellington is the new accountant at...

Question 13

The controller of MGX Industries is trying to estimate the upcoming quarter's cell phone costs for the company. The phone cost has been determined to be a mixed cost, of which $100 is the monthly base fee, and the total bill for the last quarter for employee cell phone usage was $780. Assume that 2 additional employees were given company cell phones to use for the upcoming quarter which should increase usage-related charges to increase by 20%. Using an account analysis approach, what do you expect the total cost to be for the company cell phones for the upcoming quarter?

Accepted Answer

The answer of The controller of MGX Industries is trying...

Question 14

Carl's Canine Cuts has just recently opened for business offering grooming services for all breeds of dogs. Carl has just finished his first day of service and has noted a remarkable improvement in the amount of time that it takes him to complete a grooming service for each dog. Currently, he managed to groom the 4^th dog by the end of the day in 2 hours (120 minutes) time. If Carl has an 80% learning curve, how much time should it take him to groom the 8^th dog? The 16^th dog?

Accepted Answer

The answer of Carl's Canine Cuts has just recently opened...

Question 15

If Baxter's Barber Shop is able to cut the 1^st customer's hair in 30 minutes, the 2^nd customer's hair in 28.5 minutes, the 4^th customer's hair in 27.08 minutes, and the 8^th customer's hair in 25.72 minutes, what is Baxter's learning curve?

Accepted Answer

The answer of If Baxter's Barber Shop is able to...

Question 16

Jaimin reported the following amount of time to production of the MCG products:

Accepted Answer

The answer of Jaimin reported the following amount of time...

Question 17

Mario Finzelli has just learned how to make his grandfather's famous pizza recipe. To make his first pizza, it took him 15 minutes. It should take him only 10 minutes to make a pizza. What learning curve percentage will he need to experience in order to get to the 10 minute mark by the time he makes his 4 pizzas?

Accepted Answer

The answer of Mario Finzelli has just learned how to...

Question 18

Imani is studying for her first accounting exam. She is unsure of what the teacher will ask on the exam or the material covered, so she plans to study for 4 hours. On the second exam, Imani feels more comfortable with the exam format and material, and given that she believes she has an 85% learning curve, how long should she have to study in order to achieve the same results as she received on the first exam?

Accepted Answer

The answer of Imani is studying for her first accounting...

Question 19

Ventner Manufacturing manufactures a single product. Monthly costs incurred in the production process of 1,000 units are shown below.  Compute the expected costs to be incurred when production is 3,000 units using your understanding of cost classifications to determine which of the costs are fixed or variable.

Accepted Answer

The answer of Ventner Manufacturing manufactures a single product. Monthly...

Question 20

ZZZZ Best Accounting and Tax Services pays $300 per month for a tax software license. In addition, for each tax return prepared, the business incurs variable costs of $65 per return. The relevant range for ZZZZ Best Accounting and Tax Services is 100 - 400 tax returns per month. What is the total monthly cost and per unit cost if the business prepares
a. 150 returns?
b. 200 returns?
c. 300 returns?

Accepted Answer

The answer of ZZZZ Best Accounting and Tax Services pays...

Quiz 3: Cost Behavior and Estimation

Sustainable Solutions, Inc. incurred the following costs during the previous month: Determine which of the costs in the table are variable, fixed or mixed and give an explanation for your classification for each cost.

Makito Manufacturers incurs the following costs in manufacturing computers. Match the cost driver with the related cost which would most likely cause the cost to change. -Production workers Wages

Makito Manufacturers incurs the following costs in manufacturing computers. Match the cost driver with the related cost which would most likely cause the cost to change. -Power Costs

Makito Manufacturers incurs the following costs in manufacturing computers. Match the cost driver with the related cost which would most likely cause the cost to change. -Computer chips, Memory boards, Keyboard assemblies

Makito Manufacturers incurs the following costs in manufacturing computers. Match the cost driver with the related cost which would most likely cause the cost to change. -Indirect production materials

Makito Manufacturers incurs the following costs in manufacturing computers. Match the cost driver with the related cost which would most likely cause the cost to change. -Indirect production labor wages

Sanchez Manufacturing Company collected the following production data for the past year: If the high-low method is used, what is cost equation for the year?

Nina and Marco having been working their accounting internship at Pino's Pizzeria. The owner of Pino's has provided them with the following information for the month of July, and has asked them to compute a cost equation for the pizzeria.

If Baxter's Barber Shop is able to cut the 1st customer's hair in 30 minutes, the 2nd customer's hair in 28.5 minutes, the 4th customer's hair in 27.08 minutes, and the 8th customer's hair in 25.72 minutes, what is Baxter's learning curve?

Jaimin reported the following amount of time to production of the MCG products:

If Baxter's Barber Shop is able to cut the 1^st customer's hair in 30 minutes, the 2^nd customer's hair in 28.5 minutes, the 4^th customer's hair in 27.08 minutes, and the 8^th customer's hair in 25.72 minutes, what is Baxter's learning curve?