Answered step by step
Verified Expert Solution
Link Copied!

Question

...
1 Approved Answer

Problem 1 1 - 2 4 A ( Algo ) Context - sensitive nature of cost behavior classifications LO 1 1 - 1 Rita Jekyll

Problem 11-24A (Algo) Context-sensitive nature of cost behavior classifications LO 11-1
Rita Jekyll operates a sales booth in computer software trade shows, selling an accounting software package, Abacus. She purchases the package from a software company for $165 each. Booth space at the convention hall costs $12,000 per show.
Required
a. Sales at past trade shows have ranged between 400 and 600 software packages per show. Determine the average cost of sales per unit if Ms. Jekyll sells 400,450,500,550, or 600 units of Abacus at a trade show. Use the following chart to organize your answer. Is the cost of booth space fixed or varlable?
b. If Ms. Jekyll wants to earn a $57 profit on each package of software she sells at a trade show, what price must she charge at sales volumes of 400,450,500,550, or 600 units?
c. Record the total cost of booth space If Ms. Jekyll attends one, two, three, four, or five trade shows. Is the cost of booth space fixed or varlable relative to the number of shows attended?
d. Ms. Jekyll provides decorative shopping bags to customers who purchase software packages. Some customers take the bags; others do not. Some customers stuff more than one software package into a single bag. The number of bags varles in relation to the number of units sold, but the relationship is not proportional. Assume that Ms. Jekyll uses $36 of bags for every 50 software packages sold. What is the additional cost per unit sold? Is the cost fixed or variable?
Complete this question by entering your answers in the tabs below.
Required A
Required B
Sales at past trade shows have ranged between 400 and 600 software packages per show. Determine the average cost of sales per unit if Ms. Jekyll sells 400,450,500,550, or 600 units of Abacus at a trade show. Use the following chart to organize your answer. Is the cost of booth space fixed or variable?
Note: Round "Average cost per unit" answers to 2 decimal places.
Show less
\table[[Sales Volume in Units,400,450,500,550,],[Total cost of software,$,66,000,,,]]
image text in transcribed

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Intermediate Accounting

Authors: Loren A Nikolai, D. Bazley and Jefferson P. Jones

10th Edition

978-0324300987

Students also viewed these Accounting questions