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Hello there, i need help with these accounnting problems todauy please if possible. I have a file attached, thanks. The Iowa City Veterinary Laboratory performs
Hello there, i need help with these accounnting problems todauy please if possible. I have a file attached, thanks.
The Iowa City Veterinary Laboratory performs a variety of diagnostic tests on commercial and domestic animals. The lab has incurred the following costs over the past year. Exercise 6-28 Visual-Fit Method; Veterinary Laboratory (LO 1, 2, 5) Activity Analysis, Cost Behavior, and Cost Estimation 261 Month Diagnostic Tests Completed January .............. Cost 3,050 ....................................................$61,000 February .................................4,500 ......... .... 74,500 March ................................... .7,100 ................................. 99,000 April ................................. 6,200 ..................................... .... 95,600 May ............................... 4,700 ......................................... June ......................... 5,900 ............................................ 89,000 July ............................. 6,000 ................................................. 91,000 ...74,800 August ..................................6,100 .................................................... 90,000 September .............................5,300 ............................................. 87,000 October ..................................4,900 ................................................... 76,200 November ..............................4,800 .................................................... 78,100 December ...............................5,050 .................................................... 80,700 Required: 1. Plot the data above in a scatter diagram. Assign cost to the vertical axis and the number of diagnostic tests to the horizontal axis. Visually fit a line to the plotted data. 2. Using the visually fit line, estimate the monthly fixed cost and the variable cost per diagnostic test. Question2 Corrigan Enterprises is studying the acquisition of two electrical component insertion systems for producing its sole product, the universal gismo. Data relevant to the systems follow. Model no. 6754: Variable costs, $16.00 per unit Annual fixed costs, $985,600 Model no. 4399: Variable costs, $12.80 per unit Annual fixed costs, $1,113,600 Corrigan's selling price is $64 per unit for the universal gismo, which is subject to a 5 percent sales commission. (In the following requirements, ignore income taxes.) Required: 1. How many units must the company sell to break even if Model 6754 is selected? 2. Which of the two systems would be more profitable if sales and production are expected to average 46,000 units per year? 3. Assume Model 4399 requires the purchase of additional equipment that is not reflected in the preceding figures. The equipment will cost $450,000 and will be depreciated over a fiveyear life by the straightline method. How many units must Corrigan sell to earn $956,400 of income if Model 4399 is selected? As in requirement (2), sales and production are expected to average 46,000 units per year. 4. Ignoring the information presented in requirement (3), at what volume level will management be indifferent between the acquisition of Model no. 6754 and Model no. 4399? In other words, at what volume level will the annual total cost of each system be equal? ( Hint: At any given sales volume, sales commissions will be the same amount regardless of which model is selected.)Step by Step Solution
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