Chapters 1-3 Homework Problems
Workshop 1 – Chapters 1-3
Exercise 2-2 (15 minutes) | | Product
Cost | Period
Cost | 1. | The cost of the memory chips used in a radar set | X | | 2. | Factory heating costs | X | | 3. | Factory equipment maintenance costs | X | | 4. | Training costs for new administrative employees | | X | 5. | The cost of the solder that is used in assembling the radar sets | X | | 6. | The travel costs of the company’s salespersons | | X | 7. | Wages and salaries of factory security personnel | X | | 8. | The cost of air-conditioning executive offices | | X | 9. | Wages and salaries in the department that handles billing customers | | X | 10. | Depreciation on the equipment in the fitness room used by factory workers | X | | 11. | Telephone expenses incurred by factory management | X | | 12. | The costs of shipping completed radar sets to customers | | X | 13. | The wages of the workers who assemble the radar sets | X | | 14. | The president’s salary | | X | 15. | Health insurance premiums for factory personnel | X | |
Exercise 2-3 (15 minutes) 1. | | Cups of Coffee Served in a Week | | | 1,800 | 1,900 | 2,000 | | Fixed cost | $1,100 | $1,100 | $1,100 | | Variable cost | 468 | 494 | 520 | | Total cost | $1,568 | $1,594 | $1,620 | | Average cost per cup served* | $0.871 | $0.839 | $0.810 |
* Total cost ÷ cups of coffee served in a week
2. The average cost of a cup of coffee declines as the number of cups of coffee served increases because the fixed cost is spread over more cups of coffee.
Exercise 2-4 (20 minutes) 1. | | Occupancy-Days | Electrical Costs | | High activity level (August) | 3,608 | $8,111 | | Low activity level (October) | 186 | 1,712 | | Change | 3,422 | $6,399 |
Variable cost = Change in cost ÷ Change in activity = $6,399 ÷ 3,422 occupancy-days = $1.87 per occupancy-day
Exercise 2-2 (15 minutes) | | Product
Cost | Period
Cost | 1. | The cost of the memory chips used in a radar set | X | | 2. | Factory heating costs | X | | 3. | Factory equipment maintenance costs | X | | 4. | Training costs for new administrative employees | | X | 5. | The cost of the solder that is used in assembling the radar sets | X | | 6. | The travel costs of the company’s salespersons | | X | 7. | Wages and salaries of factory security personnel | X | | 8. | The cost of air-conditioning executive offices | | X | 9. | Wages and salaries in the department that handles billing customers | | X | 10. | Depreciation on the equipment in the fitness room used by factory workers | X | | 11. | Telephone expenses incurred by factory management | X | | 12. | The costs of shipping completed radar sets to customers | | X | 13. | The wages of the workers who assemble the radar sets | X | | 14. | The president’s salary | | X | 15. | Health insurance premiums for factory personnel | X | |
Exercise 2-3 (15 minutes) 1. | | Cups of Coffee Served in a Week | | | 1,800 | 1,900 | 2,000 | | Fixed cost | $1,100 | $1,100 | $1,100 | | Variable cost | 468 | 494 | 520 | | Total cost | $1,568 | $1,594 | $1,620 | | Average cost per cup served* | $0.871 | $0.839 | $0.810 |
* Total cost ÷ cups of coffee served in a week
2. The average cost of a cup of coffee declines as the number of cups of coffee served increases because the fixed cost is spread over more cups of coffee.
Exercise 2-4 (20 minutes) 1. | | Occupancy-Days | Electrical Costs | | High activity level (August) | 3,608 | $8,111 | | Low activity level (October) | 186 | 1,712 | | Change | 3,422 | $6,399 |
Variable cost = Change in cost ÷ Change in activity = $6,399 ÷ 3,422 occupancy-days = $1.87 per occupancy-day