Week 2: Assignment from the Textbook Ex. 20.1 Listed below are nine technical accounting terms introduced in this chapter: Variable costs Relevant range Contribution margin Break-even point Fixed costs Semivariable costs Economies of scale Sales mix Unit contribution margin Each of the following statements may (or may not) describe one of these technical terms. For each statement‚ indicate the accounting
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per unit increases as total production volume increases. 1-2 Total variable costs change in response to changes in the volume of production. 1-3 The mixed cost per unit is constant throughout the relevant range of activity. 1-4 Fixed costs per unit decrease as production levels decrease. 1-5 A method used to separate mixed costs into fixed and variable components is called the high-low method. 1-6 The variable cost per unit is assumed to be constant within a particular relevant
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B) identifying which costs are variable and which costs are fixed. C) calculation of the degree of operating leverage for the company. D) estimating how many products will have to be sold to make a decent profit. Answer: B Diff: 1 Terms: cost-volume-profit (CVP) analysis Objective: 1 AACSB: Reflective thinking 3) Cost-volume-profit analysis assumes all of the following EXCEPT: A) all costs are variable or fixed B) units manufactured equal units sold C) total variable costs remain the same over the
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product costs‚ regardless weather they are variable or fixed. The cost of a unit of product under absorption costing method consists of direct materials‚direct laborand both variable and fixed overhead. Variable costing is a costing system under which those costs of production that vary with output are treated as product costs. This would usually include direct materials‚direct laborand variable portion of manufacturing overhead. 6-2 Variable costing treats variable and fixed selling and administrative
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470) $120‚555 $12‚455 F Variable expenses (50% of revenues) 54‚020 60‚277 6‚227 U Fixed expenses 53‚870 55‚000 1‚180 U Total expenses 107‚870 115‚277 7‚457 U Profit $230 $5‚278 $5‚048 F The actual profit meets the budgeted target of $230‚ therefore the manager of Jane-HW7 location is entitled to at least $1‚000 bonus. The total bonus amount = $1‚000 + ($5‚278 - $230) /10 x $1 = $1‚504.80 Budgeted Actual Cars washed 18‚400 12‚690 Price per car wash $10 $9.50 Variable cost $5 $4.75 Contribution
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TEST BANK > CONTROL PANEL > POOL MANAGER > POOL CANVAS Pool Canvas Add‚ modify‚ and remove questions. Select a question type from the Add Question drop-down list and click Go to add questions. Use Creation Settings to establish which default options‚ such as feedback and images‚ are available for question creation. Add Creation Settings Name Chapter 1--Fundamental Concepts Description Instructions Modify Add Question Here Multiple Choice 0 points Modify Remove Question Which of the following
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What is a static budget? A static budget is a budget that does not change as volume changes. If a company’s annual master budget is a static budget‚ the budget for sales commissions expense will be one amount such as $200‚000 for the year. In other words‚ in a static budget the budgeted amount for sales commissions expense will remain at $200‚000 even if the actual sales during the year are $3 million‚ $4 million or $5 million. In contrast to a company’s static master budget‚ the company’s sales
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and evaluating performance. Three major classifications of costs were discussed in this chapter—variable‚ fixed‚ and mixed. Mixed costs consist of variable and fixed elements and can be expressed in equation form as Y = a + bX‚ where X is the activity‚ Y is the cost‚ a is the fixed cost element‚ and b is the variable cost per unit of activity. Several methods can be used to estimate the fixed and variable cost components of a mixed cost using past records of cost and activity. If the relation between
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Description / Instructions: Complete the Week 1 WileyPLUS Practice Quiz. Multiple Choice Question 41 The proprietorship form of business organization generally receives favorable tax treatment relative to a corporation. combines the records of the business with the personal records of the owner. is classified as a separate legal entity. must have at least two owners in most states. Multiple Choice Question 45
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a cost formula that can be used to predict cost of an activity for a month‚ a quarter and a year. In preparing cost formula using least squares method‚ intercept represents fixed cost and slope represents the variable cost rate. Important Formula: Cost formula = Fixed cost + Variable rate * Level of activity Part 1 Step 1 Prepare a cost formula using the least squares method. x = $3‚212 + $15.15 * Number of orders received Part 2 Step 1 Use the cost formula to predict receiving orders
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