Exercise $1$

Acme Company reported the following costs and expenses for the most recent

month under $50,000$ units:

Required:

If the number of units produced and sold are $40,000$ units

What is the total amount of product costs?

What is the total amount of period costs?

If $35,000$ units are sold, what is the variable cost per unit sold?

Chapter $(1)$

Exercise $1$

Acme Company reported the following costs and expenses for the most recent month under $50,000$ units:

$\backslash$table$[[,$Amount per unit$],[$Direct materials,$$5$

Exercise $2$

Nova Company's total overhead cost at various levels of activity is presented

below:

Assume that the total overhead cost above consists of utilities, supervisory

salaries, and maintenance. The breakdown of these costs at the $120,000$

machine$-$hour level of activity is:

Nova Company's management wants to break down the maintenance cost into

its variable and fixed cost elements.

Required:

Estimate how much of the $$251,000$ of overhead cost in April

maintenance cost was. $($Hint: to do this, it may be helpful to first

determine how much of the $$204,000$ consisted of utilities and

supervisory salaries. Think about the behavior of variable and fixed

costs!$)$

Using the high$-$low method, estimate a cost formula for maintenance.

Express the company's total overhead cost in the linear equation form

$Y=a+bx.$

What total overhead cost would you expect to be incurred at an activity

level of $100,000$ machine$-$hours?