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For each of the following activities, select the most appropriate cost driver. Each cost driver may be used only once. Activity 1. Pay vendors Answer 2. Recieve material deliveries Answer 3. Inspect raw materials Answer 4. Plan for purchases of raw materials Answer 5. Packaging Answer 6. Supervision Answer 7. Employee training Answer 8. Operating machines Answer 9. Machine maintenance Answer 10. Opening accounts at a bank Answer Check Next Skip Assignment navigation Match the following terms with the best descriptions. Each description is used only once. Terms 1. Ethics Answer 2. Mission Answer 3. Controlling Answer 4. Goal Answer 5. Cost drivers Answer 6. Quality Answer 7. Balance sheet Answer 8. Income statement Answer 9. Organizational cost driver Answer 10. Financial accounting Answer 11. Activity cost driver Answer 12. Structural cost driver Answer 13. Managerial accounting Answer 14. Resources Answer 15. Product differentiation Answer Check Next Question 3 Not complete Points out of 20.00 Flag question Question text Indicate whether each phrase is more descriptive of financial accounting or managerial accounting. (a) May be subjective Financial accounting Managerial accounting (b) Often used to state corporate goals Financial accounting Managerial accounting (c) Typically prepared quarterly or annually Financial accounting Managerial accounting (d) May measure time or customer satisfaction Financial accounting Managerial accounting (e) Future oriented Financial accounting Managerial accounting (f) Has a greater emphasis on costbenefit analysis Financial accounting Managerial accounting (g) Keeps records of assets and liabilities Financial accounting Managerial accounting (h) Highly aggregated statements Financial accounting Managerial accounting (i) Must conform to external standards Financial accounting Managerial accounting (j) Specialpurpose reports Financial accounting Managerial accounting (k) Internal decisionmaking tool Financial accounting Managerial accounting (l) Income statement, balance sheet, and statement of cash flows Financial accounting Managerial accounting Check Question 4 Not complete Points out of 15.00 Flag question Question text Line and Staff Organization. Presented are the names of several departments often found in a merchandising organization such as Target. Identify each as a line or a staff department. (a) Maintenance Line Staff (b) Home Furnishings Line Staff (c) Store Manager Line Staff (d) Payroll Line Staff (e) Human Resources Line Staff (f) Advertising Line Staff Check Next Question 5 Not complete Points out of 10.00 Flag question Question text Line and Staff Organization. Presented are the names of several departments often found in a manufacturing organization such as Caterpillar. Identify each as a line or a staff department. (a) Manager, Plant 2 Line Staff (b) Design Engineering Line Staff (c) President Line Staff (d) Controller Line Staff (e) Property Accounting Line Staff (f) Sales Manager, District I Line Staff Question 6 Not complete Points out of 10.00 Flag question Question text Classify each of the following as structural, organizational, or activity cost drivers. (a) Illinois Tool Works reorganizes production facilities from a layout in which all similar types of machines are grouped together to one in which a set of machines is designated for the production of a particular product and that set of machines is grouped together. Structural Organizational Activity (b) A cable television company decides to start offering telephone service. Structural Organizational Activity (c) IBM Corporation decides to stop making personal computers. Structural Organizational Activity (d) Canon decides to start making highvolume photocopy equipment to compete headtohead with Xerox. Structural Organizational Activity (e) The number of meals a cafeteria serves. Structural Organizational Activity (f) The number of miles a taxi is driven. Structural Organizational Activity (g) A company eliminates the position of supervisor and has each work group elect a team leader. Structural Organizational Activity (h) Toyota empowers employees to halt production if a quality problem is identified. Structural Organizational Activity (i) The number of tons of grain a ship loads. Structural Organizational Activity (j) Northbrook Mall decides to build space for 80 additional stores. Structural Organizational Activity Check Next Question 7 Not complete Points out of 10.00 Flag question Question text Henderson Construction managers provide design and construction management services for various commercial construction projects. Senior managers are trying to apply cost driver concepts to their firm to better understand Henderson's costs. Classify each of the following actions or decisions as structural, organizational, or activity cost drivers. (a) The decision to be a regional leader in computerassisted design services. Structural Organizational Activity (b) The decision to allow staff architects to follow a specific project through to completion. Structural Organizational Activity (c) The daily process of inspecting the progress on various construction projects. Structural Organizational Activity (d) The process of conducting extensive client interviews to assess the exact needs for Henderson services. Structural Organizational Activity (e) The decision to expand the market area by establishing an office in another state. Structural Organizational Activity (f) The decision to use only Henderson staff rather than relying on subcontractors. Structural Organizational Activity (g) The process of receiving approval from government authorities along with appropriate permits for each project. Structural Organizational Activity (h) The decision to organize the workforce into project teams. Structural Organizational Activity (i) The decision to build a new headquarters facility with areas for design and administration as well as storage and maintenance of construction equipment. Structural Organizational Activity (j) The process of grading building sites and preparing forms for foundations. Structural Organizational Activity Question 1 Not complete Points out of 10.00 Flag question Question text Automatic versus Manual Processing MidTown Copy Service processes 2,000,000 photocopies per month at its midtown service center. Approximately 60 percent of the photocopies require collating. Collating is currently performed by high school and college students who are paid $9 per hour. Each student collates an average of 5,000 copies per hour. Management is contemplating the lease of an automatic collating machine that has a monthly capacity of 5,000,000 photocopies, with lease and operating costs totaling $1,056, plus $0.04 per 1,000 units collated. (a) Determine the total costs of collating 500,000 and 1,400,000 per month: 1. With student help: $Answer 500,000 1,400,00 0 2. $Answer With the collating machine: $Answer 500,000 1,400,00 0 $Answer (b) Determine the monthly volume at which the automatic process becomes preferable to the manual process. Answer copies. (c) Should MidTown Copy lease the automatic collating machine at this time? Midtown should lease the collating machine at the current monthly volume. Given the current cost structure Midtown should not lease the collating machine regardless of the monthly volume. Midtown should lease the collating machine only if the monthly volume is less than 600,000 copies. Midtown should only lease the collating machine if the monthly volume is more than 500,000 copies. Check Question 2 Not complete Points out of 5.00 Flag question Question text HighLow Cost Estimation Assume the local DHL delivery service hub has the following information available about fleet miles and operating costs: Year Miles Operating Costs 201 0 554,000 $179,000 201 1 674,000 215,000 Use the highlow method to develop a costestimating equation for total annual operating costs. (Let X = annual fleet miles.) Total annual costs = Answer Check + Answer * X Question 3 Not complete Points out of 30.00 Flag question Question text Cost Behavior Analysis in a Restaurant: HighLow Cost Estimation Assume a Papa John's restaurant has the following information available regarding costs at representative levels of monthly sales: Monthly sales in units 5,000 Cost of food sold 8,000 10,000 $10,000 $16,000 $20,000 Wages and fringe benefits 4,200 4,320 4,400 Fees paid delivery help 1,200 1,920 2,400 Rent on building 1,300 1,300 1,300 Depreciation on equipment 500 500 500 Utilities 800 920 1,000 Supplies (soap, floor wax, etc.) 200 260 300 1,600 1,600 1,600 Administrative costs Total $19,800 $26,820 $31,500 (a) Identify each cost as being variable, fixed, or mixed. Cost of food sold Answer Wages and fringe benefits Answer Fees paid delivery help Answer Rent on building Answer Depreciation on equipment Answer Utilities Answer Supplies (soap, floor wax, etc.) Answer Administrative costs Answer (b) Use the highlow method to develop a schedule identifying the amount of each cost that is fixed per month or variable per unit. Total the amounts under each category to develop an equation for total monthly costs. Fixed Costs Answer Cost of food sold Variable Costs Answer Fixed Costs Answer Variable Costs Answer Wages and fringe benefits Answer Answer Fees paid delivery help Answer Answer Rent on building Answer Answer Depreciation on equipment Answer Answer Answer Answer Utilities Supplies (soap, floor wax, etc.) Answer Answer Administrative costs Answer Answer Total costs equation (c) Predict total costs for a monthly sales volume of 9,100 units. $Answer Check Next Question 4 Not complete Points out of 10.00 Flag question Question text Developing an Equation from Average Costs The America Dog and Cat Hotel is a pet hotel located in Las Vegas. Assume that in March, when dog-days (occupancy) were at an annual low of 500, the average cost per dog-day was $14. In July, when dog-days were at a capacity level of 4,000, the average cost per dog-day was $7. (a) Develop an equation for monthly operating costs. (Let X = dog-days per month) Total cost = Answer + Answer *X (b) Determine the average cost per dog-day at an annual volume of 24,000 dog-days. $Answer Check Next Question 5 Not complete Points out of 10.00 Flag question Question text Classify the total costs of each of the following as variable, fixed, mixed, or step. Sales volume is the cost driver. (a) Salary of the department manager Variable Fixed Mixed Step (b) Memory chips in a computer assembly plant Variable Fixed Mixed Step (c) Real estate taxes Variable Fixed Mixed Step (d) Salaries of quality inspectors when each inspector can evaluate a maximum of 1,000 units per day Variable Fixed Mixed Step (e) Wages paid to production employees for the time spent working on products Variable Fixed Mixed Step (f) Electric power in a factory Variable Fixed Mixed Step (g) Raw materials used in production Variable Fixed Mixed Step (h) Automobiles rented on the basis of a fixed charge per day plus an additional charge per mile driven Variable Fixed Mixed Step (i) Sales commissions Variable Fixed Mixed Step (j) Depreciation on office equipment Variable Fixed Mixed Step Check Question 6 Not complete Points out of 8.00 Flag question Question text Multiple Cost Drivers Scottsdale Ltd. manufactures a variety of highvolume and lowvolume products to customer demand. Presented is information on 2009 manufacturing overhead and activity cost drivers. Level Unit Batch Total Cost Units of Cost Driver $500,000 20,000 machine hours 200,000 1,000 customer orders Level Product Total Cost 200,000 Units of Cost Driver 50 products Product X1 required 2,000 machine hours to fill 10 customer orders for a total of 8,000 units. (a) Assuming all manufacturing overhead is estimated and predicted on the basis of machine hours, determine the predicted total overhead costs to produce the 8,000 units of product X1. $Answer (b) Assuming manufacturing overhead is estimated and predicted using separate rates for machine hours, customer orders, and products (a multiplelevel cost hierarchy), determine the predicted total overhead costs to produce the 8,000 units of product X1. $Answer (c) Calculate the error in predicting manufacturing overhead using machine hours versus using multiple cost drivers. Indicate whether the use of only machine hours results in overpredicting or underpredicting the costs to produce 8,000 units of product X1. $Answer Answer (d) Determine the error in the prediction of X1 batchlevel costs resulting from the use of only machine hours. Indicate whether the use of only machine hours results in overpredicting or underpredicting the batchlevel costs of product X1. $Answer Answer (e) Determine the error in the prediction of X1 productlevel costs resulting from the use of only machine hours. Indicate whether the use of only machine hours results in overpredicting or underpredicting the productlevel costs of product X1. $Answer Answer Check Question 7 Not complete Points out of 7.00 Flag question Question text Unit and BatchLevel Cost Drivers KC, a fastfood restaurant, serves fried chicken, fried fish, and French fries. The managers have estimated the costs of a batch of fried chicken for KC's allyoucaneat Friday Fried Fiesta. Each batch must be 100 pieces. The chicken is precut by the chain headquarters and sent to the stores in 10piece bags. Each bag costs $2. Preparing a batch of 100 pieces of chicken with KC's special coating takes one employee two hours. The current wage rate is $8 per hour. Another cost driver is the cost of putting fresh oil into the fryers. New oil, costing $3, is used for each batch. (a) Determine the cost of preparing one batch of 100 pieces. $Answer (b) If management projects that it will sell 300 pieces of fried chicken, determine the total batch and unit costs. Batch cost $Answer Unit cost $Answer (c) If management estimates the sales to be 450 pieces, determine the total costs. $Answer (d) How much will the batch costs increase if the government raises the minimum wage to $10 per hour? $Answer (e) If management decided to reduce the number of pieces in a batch to 50, determine the cost of preparing 450 pieces. Assume that the batch would take half as long to prepare, and management wants to replace the oil after 50 pieces are cooked. $Answer Check Question 8 Not complete Points out of 10.00 Flag question Question text Computing Average Unit Costs The total monthly operating costs of Chili To Go are: $8,000+ $0.30X where X = servings of chili (a) Determine the average cost per serving at each of the following monthly volumes: 100; 1,000; 5,000; and 10,000. Volume Average Unit Cost $Answer 100 $Answer 1,000 Volume Average Unit Cost $Answer 5,000 $Answer 10,000 (b) Determine the monthly volume at which the average cost per serving is $0.70. Answer servings of chili Check Next Question 9 Not complete Points out of 1.00 Flag question Question text Automatic versus Manual Processing Photo Station Company operates a printing service for customers with digital cameras. The current service, which requires employees to download photos from customer cameras, has monthly operating costs of $5,000 plus $0.20 per photo printed. Management is evaluating the desirability of acquiring a machine that will allow customers to download and make prints without employee assistance. If the machine is acquired, the monthly fixed costs will increase to $10,000 and the variable costs of printing a photo will decline to $0.04 per photo. (a) Determine the total costs of printing 20,000 and 50,000 photos per month. Units 20,00 0 50,00 0 Current Process Proposed Process $Answer $Answer $Answer $Answer (b) Determine the monthly volume at which the proposed process becomes preferable to the current process. Answer units Check Next Number of different kinds of raw materials Number of classes offered Number of machine hours Number of employees Number of employees Number of maintenance hours Number of units of raw materials received Number of new customers Number of deliveries Number of checks issued Number of customer order Designing components so they are easily assembled. Factors that influence cost. Prepared as of a point in time. Accounting for external users. Increase year 2014 sales by 10 percent over-year 2013 sales. Shows the results of operations for a period of time. Packing an order for shipment. Deciding to limit market focus to a region rather than an entire nation. The degree to which a new e-book reader meets a buyers expectations. Used internally to make decisions. Consumed by activities. The propriety of taking some action. Reduces customer price sensitivity. Basic purpose toward which activities are directed. Comparing the budget with the actual results. HighLow Cost Estimation Assume the local DHL delivery service hub has the following information available about fleet miles and operating costs: Year Miles Operating Costs 2010 554,000 2011 674,000 $179,000 215,000 Use the highlow method to develop a costestimating equation for total annual operating costs. (Let X = annual fleet miles.) + Answer Total annual costs = Answer *X Check Question 4 Not complete Points out of 10.00 Flag question Question text Developing an Equation from Average Costs The America Dog and Cat Hotel is a pet hotel located in Las Vegas. Assume that in March, when dogdays (occupancy) were at an annual low of 500, the average cost per dogday was $14. In July, when dogdays were at a capacity level of 4,000, the average cost per dogday was $7. (a) Develop an equation for monthly operating costs. (Let X = dogdays per month) Total cost = Answer + Answer * X 0 0 (b) Determine the average cost per dogday at an annual volume of 24,000 dogdays. $Answer 0 Check Next Question 8 Incorrect 0.00 points out of 10.00 Flag question Question text Computing Average Unit Costs The total monthly operating costs of Chili To Go are: $12,000+ $0.30X where X = servings of chili (a) Determine the average cost per serving at each of the following monthly volumes: 100; 1,000; 5,000; and 10,000. Volume Average Unit Cost $Answer 8030 100 1,000 $Answer 8300 Volume Average Unit Cost $Answer 9500 5,000 $Answer 11000 10,000 (b) Determine the monthly volume at which the average cost per serving is $0.60. Answer 11429 servings of chili Check Feedback You have correctly selected 0. Incorrect Marks for this submission: 0.00/10.00. Question 9 Incorrect 0.00 points out of 1.00 Flag question Question text Automatic versus Manual Processing Photo Station Company operates a printing service for customers with digital cameras. The current service, which requires employees to download photos from customer cameras, has monthly operating costs of $7,000 plus $0.20 per photo printed. Management is evaluating the desirability of acquiring a machine that will allow customers to download and make prints without employee assistance. If the machine is acquired, the monthly fixed costs will increase to $12,000 and the variable costs of printing a photo will decline to $0.04 per photo. (a) Determine the total costs of printing 20,000 and 50,000 photos per month. Units Current Process $Answer Proposed Process $Answer 9000 10800 20,000 $Answer $Answer 15000 50,000 12000 (b) Determine the monthly volume at which the proposed process becomes preferable to the current process. Answer units 50000 Check Feedback You have correctly selected 0. Incorrect Marks for this submission: 0.00/1.00. Automatic versus Manual Processing MidTown Copy Service processes 2,000,000 photocopies per month at its midtown service center. Approximately 60 percent of the photocopies require collating. Collating is currently performed by high school and college students who are paid $9 per hour. Each student collates an average of 5,000 copies per hour. Management is contemplating the lease of an automatic collating machine that has a monthly capacity of 5,000,000 photocopies, with lease and operating costs totaling $1,056, plus $0.04 per 1,000 units collated. (a) Determine the total costs of collating 500,000 and 1,400,000 per month: 1. With student help: $Answer 900 500,000 1,400,000 $Answer 2520 $Answer 900 500,000 2. With the collating machine: $Answer 200 500,000 $Answer 560 1,400,000 (b) Determine the monthly volume at which the automatic process becomes preferable to the manual process. Answer copies. 1400000 (c) Should MidTown Copy lease the automatic collating machine at this time? Midtown should lease the collating machine at the current monthly volume. Given the current cost structure Midtown should not lease the collating machine regardless of the monthly volume. Midtown should lease the collating machine only if the monthly volume is less than 600,000 copies. Midtown should only lease the collating machine if the monthly volume is more than 500,000 copies. 1.00 points out of 1.00 Check Feedback You have correctly selected 3. Partially correct Marks for this submission: 5.00/10.00. Computing Average Unit Costs The total monthly operating costs of Chili To Go are: $12,000+ $0.30X where X = servings of chili (a) Determine the average cost per serving at each of the following monthly volumes: 100; 1,000; 5,000; and 10,000. Volume Average Unit Cost $Answer 8030 100 $Answer 8300 1,000 Volume Average Unit Cost $Answer 9500 5,000 $Answer 11000 10,000 (b) Determine the monthly volume at which the average cost per serving is $0.60. Answer 11429 servings of chili Check Feedback You have correctly selected 0. Incorrect Marks for this submission: 0.00/10.00. Automatic versus Manual Processing Photo Station Company operates a printing service for customers with digital cameras. The current service, which requires employees to download photos from customer cameras, has monthly operating costs of $7,000 plus $0.20 per photo printed. Management is evaluating the desirability of acquiring a machine that will allow customers to download and make prints without employee assistance. If the machine is acquired, the monthly fixed costs will increase to $12,000 and the variable costs of printing a photo will decline to $0.04 per photo. (a) Determine the total costs of printing 20,000 and 50,000 photos per month. Units Current Process $Answer Proposed Process $Answer 9000 10800 20,000 $Answer $Answer 15000 12000 50,000 (b) Determine the monthly volume at which the proposed process becomes preferable to the current process. Answer units 50000 Check Feedback You have correctly selected 0. Incorrect Marks for this submission: 0.00/1.00. Developing an Equation from Average Costs The America Dog and Cat Hotel is a pet hotel located in Las Vegas. Assume that in March, when dogdays (occupancy) were at an annual low of 500, the average cost per dogday was $14. In July, when dogdays were at a capacity level of 4,000, the average cost per dogday was $7. (a) Develop an equation for monthly operating costs. (Let X = dogdays per month) Total cost = Answer + Answer * X 15 -0.002 (b) Determine the average cost per dogday at an annual volume of 24,000 dogdays. $Answer 33 Check Feedback You have correctly selected 0. Incorrect Marks for this submission: 0.00/10.00. Next Multiple Cost Drivers Scottsdale Ltd. manufactures a variety of highvolume and lowvolume products to customer demand. Presented is information on 2009 manufacturing overhead and activity cost drivers. Level Unit Total Cost Units of Cost Driver $500,000 20,000 machine hours Batch 200,000 1,000 customer orders Product 200,000 50 products Product X1 required 2,000 machine hours to fill 10 customer orders for a total of 8,000 units. (a) Assuming all manufacturing overhead is estimated and predicted on the basis of machine hours, determine the predicted total overhead costs to produce the 8,000 units of product X1. $Answer 20250 (b) Assuming manufacturing overhead is estimated and predicted using separate rates for machine hours, customer orders, and products (a multiplelevel cost hierarchy), determine the predicted total overhead costs to produce the 8,000 units of product X1. $Answer 22250 (c) Calculate the error in predicting manufacturing overhead using machine hours versus using multiple cost drivers. Indicate whether the use of only machine hours results in overpredicting or underpredicting the costs to produce 8,000 units of product X1. $Answer 2000 Answer Over-prediction (d) Determine the error in the prediction of X1 batchlevel costs resulting from the use of only machine hours. Indicate whether the use of only machine hours results in overpredicting or underpredicting the batchlevel costs of product X1. $Answer Answer 30000 Over-prediction (e) Determine the error in the prediction of X1 productlevel costs resulting from the use of only machine hours. Indicate whether the use of only machine hours results in overpredicting or underpredicting the productlevel costs of product X1. $Answer Answer 5000 Check Feedback You have correctly selected 3. Partially correct Marks for this submission: 3.00/8.00. Next HighLow Cost Estimation Assume the local DHL delivery service hub has the following information available about fleet miles and operating costs: Year Miles Operating Costs 2010 554,000 2011 674,000 $179,000 215,000 Use the highlow method to develop a costestimating equation for total annual operating costs. (Let X = annual fleet miles.) + Answer Total annual costs = Answer *X Check Question 4 Not complete Points out of 10.00 Flag question Question text Developing an Equation from Average Costs The America Dog and Cat Hotel is a pet hotel located in Las Vegas. Assume that in March, when dogdays (occupancy) were at an annual low of 500, the average cost per dogday was $14. In July, when dogdays were at a capacity level of 4,000, the average cost per dogday was $7. (a) Develop an equation for monthly operating costs. (Let X = dogdays per month) Total cost = Answer + Answer * X 0 0 (b) Determine the average cost per dogday at an annual volume of 24,000 dogdays. $Answer 0 Check Next Question 8 Incorrect 0.00 points out of 10.00 Flag question Question text Computing Average Unit Costs The total monthly operating costs of Chili To Go are: $12,000+ $0.30X where X = servings of chili (a) Determine the average cost per serving at each of the following monthly volumes: 100; 1,000; 5,000; and 10,000. Volume Average Unit Cost $Answer 8030 100 1,000 $Answer 8300 Volume Average Unit Cost $Answer 9500 5,000 $Answer 11000 10,000 (b) Determine the monthly volume at which the average cost per serving is $0.60. Answer 11429 servings of chili Check Feedback You have correctly selected 0. Incorrect Marks for this submission: 0.00/10.00. Question 9 Incorrect 0.00 points out of 1.00 Flag question Question text Automatic versus Manual Processing Photo Station Company operates a printing service for customers with digital cameras. The current service, which requires employees to download photos from customer cameras, has monthly operating costs of $7,000 plus $0.20 per photo printed. Management is evaluating the desirability of acquiring a machine that will allow customers to download and make prints without employee assistance. If the machine is acquired, the monthly fixed costs will increase to $12,000 and the variable costs of printing a photo will decline to $0.04 per photo. (a) Determine the total costs of printing 20,000 and 50,000 photos per month. Units Current Process $Answer Proposed Process $Answer 9000 10800 20,000 $Answer $Answer 15000 50,000 12000 (b) Determine the monthly volume at which the proposed process becomes preferable to the current process. Answer units 50000 Check Feedback You have correctly selected 0. Incorrect Marks for this submission: 0.00/1.00. Automatic versus Manual Processing MidTown Copy Service processes 2,000,000 photocopies per month at its midtown service center. Approximately 60 percent of the photocopies require collating. Collating is currently performed by high school and college students who are paid $9 per hour. Each student collates an average of 5,000 copies per hour. Management is contemplating the lease of an automatic collating machine that has a monthly capacity of 5,000,000 photocopies, with lease and operating costs totaling $1,056, plus $0.04 per 1,000 units collated. (a) Determine the total costs of collating 500,000 and 1,400,000 per month: 1. With student help: $Answer 900 500,000 1,400,000 $Answer 2520 $Answer 900 500,000 2. With the collating machine: $Answer 200 500,000 $Answer 560 1,400,000 (b) Determine the monthly volume at which the automatic process becomes preferable to the manual process. Answer copies. 1400000 (c) Should MidTown Copy lease the automatic collating machine at this time? Midtown should lease the collating machine at the current monthly volume. Given the current cost structure Midtown should not lease the collating machine regardless of the monthly volume. Midtown should lease the collating machine only if the monthly volume is less than 600,000 copies. Midtown should only lease the collating machine if the monthly volume is more than 500,000 copies. 1.00 points out of 1.00 Check Feedback You have correctly selected 3. Partially correct Marks for this submission: 5.00/10.00. Computing Average Unit Costs The total monthly operating costs of Chili To Go are: $12,000+ $0.30X where X = servings of chili (a) Determine the average cost per serving at each of the following monthly volumes: 100; 1,000; 5,000; and 10,000. Volume Average Unit Cost $Answer 8030 100 $Answer 8300 1,000 Volume Average Unit Cost $Answer 9500 5,000 $Answer 11000 10,000 (b) Determine the monthly volume at which the average cost per serving is $0.60. Answer 11429 servings of chili Check Feedback You have correctly selected 0. Incorrect Marks for this submission: 0.00/10.00. Automatic versus Manual Processing Photo Station Company operates a printing service for customers with digital cameras. The current service, which requires employees to download photos from customer cameras, has monthly operating costs of $7,000 plus $0.20 per photo printed. Management is evaluating the desirability of acquiring a machine that will allow customers to download and make prints without employee assistance. If the machine is acquired, the monthly fixed costs will increase to $12,000 and the variable costs of printing a photo will decline to $0.04 per photo. (a) Determine the total costs of printing 20,000 and 50,000 photos per month. Units Current Process $Answer Proposed Process $Answer 9000 10800 20,000 $Answer $Answer 15000 12000 50,000 (b) Determine the monthly volume at which the proposed process becomes preferable to the current process. Answer units 50000 Check Feedback You have correctly selected 0. Incorrect Marks for this submission: 0.00/1.00. Developing an Equation from Average Costs The America Dog and Cat Hotel is a pet hotel located in Las Vegas. Assume that in March, when dogdays (occupancy) were at an annual low of 500, the average cost per dogday was $14. In July, when dogdays were at a capacity level of 4,000, the average cost per dogday was $7. (a) Develop an equation for monthly operating costs. (Let X = dogdays per month) Total cost = Answer + Answer * X 15 -0.002 (b) Determine the average cost per dogday at an annual volume of 24,000 dogdays. $Answer 33 Check Feedback You have correctly selected 0. Incorrect Marks for this submission: 0.00/10.00. Next Multiple Cost Drivers Scottsdale Ltd. manufactures a variety of highvolume and lowvolume products to customer demand. Presented is information on 2009 manufacturing overhead and activity cost drivers. Level Unit Total Cost Units of Cost Driver $500,000 20,000 machine hours Batch 200,000 1,000 customer orders Product 200,000 50 products Product X1 required 2,000 machine hours to fill 10 customer orders for a total of 8,000 units. (a) Assuming all manufacturing overhead is estimated and predicted on the basis of machine hours, determine the predicted total overhead costs to produce the 8,000 units of product X1. $Answer 20250 (b) Assuming manufacturing overhead is estimated and predicted using separate rates for machine hours, customer orders, and products (a multiplelevel cost hierarchy), determine the predicted total overhead costs to produce the 8,000 units of product X1. $Answer 22250 (c) Calculate the error in predicting manufacturing overhead using machine hours versus using multiple cost drivers. Indicate whether the use of only machine hours results in overpredicting or underpredicting the costs to produce 8,000 units of product X1. $Answer 2000 Answer Over-prediction (d) Determine the error in the prediction of X1 batchlevel costs resulting from the use of only machine hours. Indicate whether the use of only machine hours results in overpredicting or underpredicting the batchlevel costs of product X1. $Answer Answer 30000 Over-prediction (e) Determine the error in the prediction of X1 productlevel costs resulting from the use of only machine hours. Indicate whether the use of only machine hours results in overpredicting or underpredicting the productlevel costs of product X1. $Answer Answer 5000 Check Feedback You have correctly selected 3. Partially correct Marks for this submission: 3.00/8.00. Next