Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The controller of the South Charleston plant of Ravinia, Inc., monitored activities associated with materials handling costs. The high and low levels of resource usage

The controller of the South Charleston plant of Ravinia, Inc., monitored activities associated with materials handling costs. The high and low levels of resource usage occurred in September and March for three different resources associated with materials handling. The number of moves is the driver. The total costs of the three resources and the activity output, as measured by moves for the two different levels, are presented as follows:
Resource Number of Moves Total Cost
Forklift depreciation:
Low 4,000 $2,400
High 14,0002,400
Indirect labor:
Low 4,000 $55,400
High 14,000101,400
Fuel and oil for forklift:
Low 4,000 $2,720
High 14,0009,520
Required:
If required, round your answers to two decimal places. Enter a "0" if required.
1. Determine the cost behavior formula of each resource. Use the high-low method to assess the fixed and variable components.
Forklift depreciation:
V $fill in the blank 1
F $fill in the blank 2
Y $fill in the blank 3
Indirect labor:
V $fill in the blank 4
F $fill in the blank 5
Y $fill in the blank 6
+ $fill in the blank 7
X
Fuel and oil for forklift:
V $fill in the blank 8
F $fill in the blank 9
Y $fill in the blank 10
X
2. Using your knowledge of cost behavior, predict the cost of each item for an activity output level of 9,000 moves.
Forklift depreciation $fill in the blank 11
Indirect labor $fill in the blank 12
Fuel and oil for forklift $fill in the blank 13
3. Construct a cost formula that can be used to predict the total cost of the three resources combined. If required, round your answers to two decimal places.
Materials handling cost = $fill in the blank 14
+ $fill in the blank 15
X
Using this formula, predict the total materials handling cost if activity output is 9,000 moves.
Y = $fill in the blank 16

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored 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

Financial Accounting

Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso

2nd Edition

047116920X, 978-0471169208

More Books

Students also viewed these Accounting questions

Question

What do I have experience doing?

Answered: 1 week ago

Question

Identify and define the eight channels of nonverbal communication

Answered: 1 week ago