ACC230 FRI 8AM F2013_CH_3 HW
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acc230_fri_8am_f2013_ch_3_hw.docx
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Assignment: CHAPTER 3 HW |
1.
Multiple Choice 3-1
A factor that causes or leads to a change in a cost or activity is a(n)
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2.
Multiple Choice 3-4
The following cost formula was developed by using monthly data for a hospital.
Total Cost = $128,000,000 + ($12,000 x Number of Patient Days)
In the cost formula, the term $128,000,000
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3.
Multiple Choice 3-5
The following cost formula was developed by using monthly data for a hospital.
Total Cost = $128,000,000 + ($12,000 x Number of Patient Days)
In the cost formula, the term $12,000
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4.
Multiple Choice 3-6
The following cost formula was developed by using monthly data for a hospital.
Total Cost = $128,000,000 + ($12,000 x Number of Patient Days)
In the cost formula, the term "Number of patient days"
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5.
Multiple Choice 3-7
The following cost formula was developed by using monthly data for a hospital.
Total Cost = $128,000,000 + ($12,000 x Number of Patient Days)
In the cost formula, the term "Total cost"
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6.
Multiple Choice 3-8
The following cost formula for total purchasing cost in a factory was developed using monthly data.
Total Cost = $235,000 + ($75 x Number of Purchase Orders)
Next month, 8,000 purchase orders are predicted. The total cost predicted for the purchasing department next month
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7.
Multiple Choice 3-9
An advantage of the high-low method is that it
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8.
Multiple Choice 3-11
The following six months of data were collected on maintenance cost and the number of machine hours in a factory:
Select the correct set of high and low months.
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9.
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eBookeBookeBookeBookeBookeBook VideoVideoVideoVideoVideoVideo Cornerstone Exercise 3-16 Using High-Low to Calculate Fixed Cost, Calculate the Variable Rate, and Construct a Cost Function Pizza Vesuvio makes specialty pizzas. Data for the past eight months were collected:
Pizza Vesuvio's controller wants to calculate the fixed and variable costs associated with labor used in the restaurant. In your calculations, round the variable rate per employee hour to the nearest cent. Required: 1. Using the high-low method, calculate the fixed cost of labor. $ _________________ 2. Using the high-low method, calculate the variable rate. $ _________________ per employee hour 3. Using the high-low method, construct the cost formula for total labor cost. Total labor cost = $ _________________ + [$ _________________ × Employee hours]
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10.
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eBookeBookeBookeBookeBookeBook VideoVideoVideoVideoVideoVideo Cornerstone Exercise 3-17 Using High-Low to Calculate Predicted Total Variable Cost and Total Cost for Budgeted Output Pizza Vesuvio makes specialty pizzas. Data for the past eight months were collected:
Assume that this information was used to construct the following formula for monthly labor cost.
Required: Assume that 675 employee hours are budgeted for the month of September. Use the total labor cost formula for the following calculations: 1. Calculate total variable labor cost for September. $ _________________ 2. Calculate total labor cost for September. $ _________________
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11.
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eBookeBookeBookeBookeBookeBook VideoVideoVideoVideoVideoVideo Cornerstone Exercise 3-18 Using High-Low to Calculate Predicted Total Variable Cost and Total Cost for a Time Period that Differs from the Data Period Pizza Vesuvio makes specialty pizzas. Data for the past eight months were collected:
Assume that this information was used to construct the following formula for monthly labor cost.
Required: Assume that 4,000 employee hours are budgeted for the coming year. Use the total labor cost formula to make the following calculations: 1. Calculate total variable labor cost for the coming year. $ _________________ 2. Calculate total fixed labor cost for the coming year. $ _________________ 3. Calculate total labor cost for the coming year. $ _________________
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12.
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eBookeBookeBookeBookeBookeBook Exercise 3-20 Variable and Fixed Costs What follows are a number of resources that are used by a manufacturer of futons. Assume that the output measure or cost driver is the number of futons produced. All direct labor is paid on an hourly basis, and hours worked can be easily changed by management. All other factory workers are salaried. Required: Classify the resource costs as variable or fixed.
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13.
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eBookeBookeBookeBookeBookeBook Exercise 3-24 Cost Behavior Alisha Incorporated manufactures medical stents for use in heart bypass surgery. Based on past experience, Alisha has found that its total maintenance costs can be represented by the following formula: Maintenance Cost = $1,750,000 + $125X, where X = Number of Heart Stents. Last year, Alisha produced 25,000 medical stents. Actual maintenance costs for the year were as expected. Required: 1. What is the total maintenance cost incurred by Alisha last year? $ _________________ 2. What is the total fixed maintenance cost incurred by Alisha last year? $ _________________ 3. What is the total variable maintenance cost incurred by Alisha last year? $ _________________ 4. What is the maintenance cost per unit produced? $ _________________ per unit 5. What is the fixed maintenance cost per unit? $ _________________ per unit 6. What is the variable maintenance cost per unit? $ _________________ per unit 7. Conceptual Connection: The number of stents produced in Exercise 3-24 (25,000) is only half of the number produced in Exercise 3-23 (50,000), yet the maintenance cost per unit (see Requirement 4) is larger in Exercise 3-24 than in Exercise 3-23. Briefly explain why Alisha's maintenance cost per unit in Exercise 3-24 is different than in Exercise 3-23. Should Alisha's management use maintenance cost per unit to make decisions? The input in the box below will not be graded, but may be reviewed and considered by your instructor. _________________
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14.
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eBookeBookeBookeBookeBookeBook Exercise 3-30 High-Low Method Luisa Crimini has been operating a beauty shop in a college town for the past 10 years. Recently, Luisa rented space next to her shop and opened a tanning salon. She anticipated that the costs for the tanning service would primarily be fixed but found that tanning salon costs increased with the number of appointments. Costs for this service over the past eight months are as follows:
Required: 1. Which month represents the high point? The low point?
2. Using the high-low method, compute the variable rate for tanning. Compute the fixed cost per month. Round the variable rate per tanning appointment to the nearest cent.
3. Using the variable rate and fixed cost, what is the cost formula for tanning services? _________________ 4. Calculate the total predicted cost of tanning services for September for 2,500 appointments using the cost formula found in Requirement 3. Of that total cost, how much is the total fixed cost for September? How much is the total predicted variable cost for September? In your calculations, round variable cost per unit to the nearest cent. If required, round the final answers to the nearest dollar.
5. Conceptual Connection: Identify and briefly explain any additional issues that Luisa might be wise to consider when using the high-low method to estimate the costs of her tanning salon. The input in the box below will not be graded, but may be reviewed and considered by your instructor. _________________
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