ACCTG problem

As s ignm ent: HW Set #2 - E3.10, E3.19, E16.16, E16.20 1. eBook eBook eBook eBook Exercise 3 .1 0 C o s t Be h a vio r Smo ke C ity, In c., ma n u fa ctu re s b a rb e q u e s mo ke rs . Ba s e d o n p a s t e xp e rie n ce , Smo ke C ity h a s fo u n d th a t its to ta l a n n u a l o ve rh e a d co s ts ca n b e re p re s e n te d b y th e fo llo w in g fo rmu la : O ve rh e a d co s t = $ 5 4 3 ,0 0 0 + $ 1 .3 4 X, w h e re X e q u a ls n u mb e r o f s mo ke rs . La s t ye a r, Smo ke C ity p ro d u ce d 2 0 ,0 0 0 s mo ke rs . Actu a l o ve rh e a d co s ts fo r th e ye a r w e re a s e xp e cte d . Required: 1 . W h a t is th e d rive r fo r th e o ve rh e a d a ctivity? _________________ Fo r q u e s tio n s 2 -4 , E n te r th e fin a l a n s w e rs ro u n d e d to th e n e a re s t d o lla r. 2 . W h a t is th e to ta l o ve rh e a d co s t in cu rre d b y Smo ke C ity la s t ye a r? $ _________________ 3 . W h a t is th e to ta l fixe d o ve rh e a d co s t in cu rre d b y Smo ke C ity la s t ye a r? $ _________________ 4 . W h a t is th e to ta l va ria b le o ve rh e a d co s t in cu rre d b y Smo ke C ity la s t ye a r? $ _________________ Fo r q u e s tio n s 5 -8 , ro u n d yo u r a n s w e rs to th e n e a re s t ce n t. Us e th o s e ro u n d e d fig u re s in s u b s e q u e n t co mp u ta tio n s , if n e ce s s a ry. 5 . W h a t is th e o ve rh e a d co s t p e r u n it p ro d u ce d ? $ _________________ p e r u n it 6 . W h a t is th e fixe d o ve rh e a d co s t p e r u n it? $ _________________ p e r u n it 7 . W h a t is th e va ria b le o ve rh e a d co s t p e r u n it? $ _________________ p e r u n it 8 . Re ca lcu la te Re q u ire me n ts 5 , 6 , a n d 7 fo r th e fo llo w in g le ve ls o f p ro d u ctio n : (a ) 1 9 ,5 0 0 u n its a n d (b ) 2 1 ,6 0 0 u n its . 1 9 ,5 0 0 Units Un it co s t 2 1 ,6 0 0 Units $ $ _________________ _________________ Un it fixe d _________________ _________________ co s t Un it va ria b le _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ co s t Th e re a s o n th e u n it co s ts ch a n g e d in th e w a y th e y d id is b e ca u s e : _________________ 2. eBook eBook eBook eBook Exercise 3 .1 9 Hig h -Lo w Me th o d , C o s t Fo rmu la s Th e co n tro lle r o f th e So u th C h a rle s to n p la n t o f Ra vin ia , In c., mo n ito re d a ctivitie s a s s o cia te d w ith ma te ria ls h a n d lin g co s ts . Th e h ig h a n d lo w le ve ls o f re s o u rce u s a g e o ccu rre d in Se p te mb e r a n d Ma rch fo r th re e d iffe re n t re s o u rce s a s s o cia te d w ith ma te ria ls h a n d lin g . Th e n u mb e r o f mo ve s is th e d rive r. Th e to ta l co s ts o f th e th re e re s o u rce s a n d th e a ctivity o u tp u t, a s me a s u re d b y mo ve s fo r th e tw o d iffe re n t le ve ls , a re p re s e n te d a s fo llo w s : Required: If re q u ire d , ro u n d yo u r a n s w e rs to tw o d e cima l p la ce s . E n te r a " 0 " if re q u ire d . 1 . De te rmin e th e co s t b e h a vio r fo rmu la o f e a ch re s o u rce . Us e th e h ig h -lo w me th o d to a s s e s s th e fixe d a n d va ria b le co mp o n e n ts . Forklift depreciation: V$ _________________ F$ _________________ Y$ _________________ Indirect labor: V$ _________________ F$ _________________ Y$ _________________ +$ _________________ X Fuel and oil for forklift: V$ _________________ F$ _________________ Y$ _________________ X 2 . Us in g yo u r kn o w le d g e o f co s t b e h a vio r, p re d ict th e co s t o f e a ch ite m fo r a n a ctivity o u tp u t le ve l o f 9 ,0 0 0 mo ve s . Fo r in te rim co mp u ta tio n s , ca rry a mo u n ts o u t to tw o d e cima l p la ce s . Ro u n d yo u r fin a l a n s w e r to th e n e a re s t d o lla r. Fo rklift d e p re cia tio n $ _________________ In d ire ct la b o r $ _________________ Fu e l a n d o il fo r $ _________________ fo rklift 3 . C o n s tru ct a co s t fo rmu la th a t ca n b e u s e d to p re d ict th e to ta l co s t o f th e th re e re s o u rce s co mb in e d . If re q u ire d , ro u n d yo u r a n s w e rs to tw o d e cima l p la ce s . Ma te ria ls h a n d lin g co s t = $ _________________ +$ _________________ X Us in g th is fo rmu la , p re d ict th e to ta l ma te ria ls h a n d lin g co s t if a ctivity o u tp u t is 9 ,0 0 0 mo ve s . Y =$ _________________ 3. eBook eBook eBook eBook Exercise 1 6 .1 6 C VP : Be fo re - a n d Afte r-Ta x Ta rg e te d In co me He a d -Ge a r C o mp a n y p ro d u ce s h e lme ts fo r b icycle ra cin g . C u rre n tly, He a d -Ge a r ch a rg e s a p rice o f $ 2 3 0 p e r h e lme t. Va ria b le co s ts a re $ 8 0 .5 0 p e r h e lme t, a n d fixe d co s ts a re $ 1 ,2 5 5 ,8 0 0 . Th e ta x ra te is 2 5 p e rce n t. La s t ye a r, 1 4 ,0 0 0 h e lme ts w e re s o ld . Required: 1 . W h a t is He a d -Ge a r's n e t in co me fo r la s t ye a r? $ _________________ 2 . W h a t is He a d -Ge a r's b re a k-e ve n re ve n u e ? In yo u r co mp u ta tio n s , ro u n d th e co n trib u tio n ma rg in ra tio to tw o d e cima l p la ce s . $ _________________ 3 . Su p p o s e He a d -Ge a r w a n ts to e a rn b e fo re -ta x o p e ra tin g in co me o f $ 9 0 0 ,0 0 0 . Ho w ma n y u n its mu s t b e s o ld ? Ro u n d to th e n e a re s t w h o le u n it. _________________ u n its 4 . Su p p o s e He a d -Ge a r w a n ts to e a rn a fte r-ta x n e t in co me o f $ 6 5 0 ,0 0 0 . Ho w ma n y u n its mu s t b e s o ld ? Ro u n d to th e n e a re s t w h o le u n it. _________________ u n its 5 . Su p p o s e th e in co me ta x ra te ris e s to 3 5 p e rce n t. Ho w ma n y u n its mu s t b e s o ld fo r He a d -Ge a r to e a rn a fte r-ta x in co me o f $ 6 5 0 ,0 0 0 ? Ro u n d to th e n e a re s t w h o le u n it. _________________ u n its 4. eBook eBook eBook eBook Exercise 1 6 .2 0 C o n trib u tio n Ma rg in , C VP , Ne t In co me , Ma rg in o f Sa fe ty Na il Glo w , In c., p ro d u ce s n o ve lty n a il p o lis h e s . E a ch b o ttle s e lls fo r $ 5 .9 0 . Va ria b le u n it co s ts a re a s fo llo w s : Fixe d o ve rh e a d co s ts a re $ 3 4 ,4 7 5 p e r ye a r. Fixe d s e llin g a n d a d min is tra tive co s ts a re $ 6 ,7 2 0 p e r ye a r. Na il Glo w s o ld 3 5 ,0 0 0 b o ttle s la s t ye a r. Required: 1 . W h a t is th e co n trib u tio n ma rg in p e r u n it fo r a b o ttle o f n a il p o lis h ? $ _________________ p e r u n it W h a t is th e co n trib u tio n ma rg in ra tio ? Ro u n d yo u r a n s w e r to fo u r d e cima l p la ce s . _________________ 2 . Ho w ma n y b o ttle s mu s t b e s o ld to b re a k e ve n ? _________________ b o ttle s W h a t is th e b re a k-e ve n s a le s re ve n u e ? Ro u n d yo u r a n s w e r to th e n e a re s t d o lla r, if ro u n d in g is re q u ire d . $ _________________ 3 . W h a t w a s Na il Glo w 's o p e ra tin g in co me la s t ye a r? $ _________________ 4 . W h a t w a s th e ma rg in o f s a fe ty in re ve n u e ? $ _________________ 5 . Su p p o s e th a t Na il Glo w , In c., ra is e s th e p rice to $ 6 .5 0 p e r b o ttle , b u t a n ticip a te d s a le s w ill d ro p to 2 8 ,7 5 0 b o ttle s . W h a t w ill th e n e w b re a k-e ve n p o in t in u n its b e ? Ro u n d yo u r a n s w e r u p to th e n e a re s t w h o le n u mb e r o f u n its . _________________ Sh o u ld Na il Glo w ra is e th e p rice ? _________________