Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The of relevane range also applies to variable costs. As shown in Exhibir coe the hoeel's currene variable cost for toiletries is $3 per guest.

image text in transcribed
The of relevane range also applies to variable costs. As shown in Exhibir coe the hoeel's currene variable cost for toiletries is $3 per guest. However, as room occa toiletries from its relevant ranges for occupancy unts gnow, management hopes to negotiate greater volume d suppliers. These volume discounts will decrease the va sce cost per guest (for example, down to $2.75 per guest). Exhibit 6-8 illustrates ditf the hotels variable toiletries cost Why s, the concept of relevant range important? Managers can predict co rately only if they use cost information for the appropriate relevant range. For exaec phone plan in which the first 5 GB of data each month costs $50. After 5 GB are used ft ges. The first relevant range extends from 0 to 5 GB. In this range, the $50 fee beha of S GB. To accurately predict costs, customers need to know in which relevant range they think about smartphone plans. Many smartphone plans offer unlimited talk and t and a large block of data for a fixed fee each month. If the customer exceeds the au amount of data, the company charges an additional per-MB fee. Exhibit 6-9 shows ad the allot must pay an additional 1.5 cents per MB. This smartphone plan has two te strictly as a fixed cost. The a flat $50 fee nitely customer could use 0 MB, 800 MB, or 5 GB of data a d still pay that month. The second relevant range starts after 5 GB and extends range, the cost is mixed: $50 plus 1.5 cents per MB of data in exceu plan to operate. The same holds true for businesses. 6) Ryan Fabrication allocates manufacturing overhead to each job using departmental overhead rates. Ryan's operations are divided into a metal casting department and a metal finishing department. The casting department uses a departmental overhead rate of $52 per machine hour, while the finishing department uses a departmental overhead rate of $28 per direct labor hour. Job A216 used the following direct labor hours and machine hours in the two departments: (6 points) Actual results Direct labor hours used Casting rtment Finishing artment 12 The cost for direct labor is $32 per direct labor hour and the cost of the direct materials used by Job A216 is $1,800. What was the total cost of Job A216 if Ryan Fabrication used the departmental overhead rates to allocate manufacturing overhead? 7) Preston Racquets manufactures tennis racquets. The following data are available for last month

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_2

Step: 3

blur-text-image_3

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

Swanson On Internal Auditing Raising The Bar

Authors: IT Governance Publishing

1st Edition

1849280673, 978-1849280679

More Books

Students also viewed these Accounting questions