QUESTIONS

1- What is a typical use of managerial accounting?

2 Three cost incurred by Pitt company are summarized below:

1,000 units 2,000 units

Cost A $10,000 $15,000

Cost B $21,000 $ 21,000

Cost C $16,000 $32,000

Which of these cost are variable?

3- True of false: Revenues and cost that differ are relevant and should be considered in incremental analysis.

4- Bellfont company produces door stoppers. August production costs are below:

Door stoppers produced: 77,000

Direct material (variable) $20,000

Direct labor (variable cost) $40.000

Supplies ( variable) 20,000

supervision (fixed) 26,900

Depreciation (fixed) 22,500

Others (fixed) 3,000

In September Bellfont expects to produce 100,000 door stoppers. Assuming no structural changes, what is Bellont's production cost per door stopper for September?

5- Aaron's chair is in the process of preparing a production cost budget for August.

Actual costs in July for 120 chairs were:

Materials cost $4810

Labor cost 2920

Rent 1500

Depreciation 2500

Other fixed cost 3200

Material and labor are the only variable costs. If production and sales are budgeted to change to 120 chairs in August, how much is the expected total variable cost on the August budged?

6- Stellar company has the following sales, variable cost, and fixed cost. If sales increase by $ 10,000 then their profit increases/ decreases by how much?

Sales $50,000

Variable cost $9,800

Fixed cost $25,000

7- Susan is trying to decide whether or not to attend college during the next 12 week session. She has the following options:

a-Attend college full-time at a cost of $1200

b-Attend college part time at a cost of $500 and work part time earning $1700

c-Work full-time earning $5000.

What is susan's incremental profit if she chooses C over option B

8-Professional University teachers a large range of undergraduate courses. It is interested in determining the cost equation for the facilities cost as a function of students credits hours so that it an more accurately budged its facilities costs as enrollment grows. Information for the high and low cost semester and volume for last 5 year appears below

Semester Student credit hour Facilities

spring 2007 250,000 $500,000

Fall 2004 300,000 $530,000

Using the high low method, with student credit hours as the activity driver, what is the equation for facilities cost (FC) as function of the student credit hours?