Question
1. Month Total Maintenance Cost Production Volume (units) January $ 1,980 1,850 units February $ 1,800 1,500 units March $ 2,200 2,600 units April $
1.
Month | Total Maintenance Cost | Production Volume (units) | ||||
January | $ | 1,980 | 1,850 | units | ||
February | $ | 1,800 | 1,500 | units | ||
March | $ | 2,200 | 2,600 | units | ||
April | $ | 2,180 | 2,275 | units | ||
May | $ | 2,300 | 2,750 | units | ||
Using the high-low method, the variable rate for maintenance is:
Multiple Choice
-
$0.40.
-
$0.75.
-
$1.50.
-
$2.00.
2. The current cost structure for the production department of Performance, Inc., has fixed expenses of $500,000 and variable expenses of $200 per unit. Unit sales volume is 6,000 units. Performance, Inc., can reduce variable expenses to $100 per unit with automated manufacturing technology. What is the new fixed expense amount after automation that will produce the same current operating income on sales volume of 6,000 units?
Multiple Choice
-
$500,000.
-
$1,100,000.
-
$1,200,000.
-
$1,700,000.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started