Exam 3: Cost Behaviour

Cardinal Cleaners Cardinal Cleaners documented the gallons of cleaning solvent it used as well as total overhead costs for the past five months as follows: Number of gallons Total overhead costs July 160 \ 6500 August 150 6100 September 155 6700 October 175 7000 November 170 6800 -Cardinal uses the high/low method to predict total overhead costs.If Cardinal anticipates using 200 gallons of solvent in December,what are expected total overhead costs?

Putnam Distributors is contemplating whether or not to accept a special order.Putnam wishes to have after-tax cash receipts of $5200 if they accept the order.If Putnam has a tax rate of 35 per cent,what is the price the customer should be charged for their order?

Jansen Inc.currently produces and sells 12 000 units per year with the following cost data: Variable costs \ 10 per unit Fixed costs \ 30000 Next year,Jansen plans to increase its advertising budget,which will increase fixed costs by 5 per cent.With increased advertising,the company expects the number of units produced and sold to increase by 8 per cent.What are budgeted total costs expected to be next year?

Cardinal Cleaners Cardinal Cleaners documented the gallons of cleaning solvent it used as well as total overhead costs for the past five months as follows: Number of gallons Total overhead costs July 160 \ 6500 August 150 6100 September 155 6700 October 175 7000 November 170 6800 -Using the high/low method,what is the variable cost per unit?

Cardinal Cleaners Cardinal Cleaners documented the gallons of cleaning solvent it used as well as total overhead costs for the past five months as follows: Number of gallons Total overhead costs July 160 \ 6500 August 150 6100 September 155 6700 October 175 7000 November 170 6800 -Using the high/low method,what is equation to predict total overhead costs?

You run a regression analysis and receive the following results: SUMMARY OUTPUT Regression Statistics Multiple R 0.88000000 R Square 0.78219168 Adjusted R Square 0.70958891 Standard Error 1165.19000 Observations 5 df SS MS F Significance F Regression 1 14626984.4 1+07 10.7736 0.0463451 Residual 3 4073015.604 1+06 Total 4 18700000 Coefficients Standard Error t Stat P -value Intercept 16146.37 8167.49 1.977 0.14249 X Variable 1 2.380 0.730 3.282 0.04635 -What would be the equation to predict mixed cost behaviour?

Briefly describe the difference between fixed,variable,and mixed costs.Give one example of each.

Bob’s Burgers currently produces and sells 4000 burgers per month with the following costs: Variable costs \ .50 per unit Fixed costs \ 2000 Bob has recently switched food suppliers and anticipates that variable costs will decrease by $.05 per unit. In addition, Bob has renegotiated his store lease and fixed costs will be dropping by $40 per month. -Bixby Inc.expects total costs to be $2500 when 80 units are sold and the variable cost is $10 per unit.Bixby expects to sell 90 units in July.What will be expected total costs in July?

When predicting cost behaviour,the volume of production for which the fixed and variable cost relationships are assumed to hold true is called the:

Under variable costing,which of the following is not considered a product cost?

Describe regression analysis and list several of its possible uses.

Variable costing has the following advantages:

Chadwick Ski Lodge Chadwick Ski Lodge decides how many housekeepers it needs to hire based on expected hotel occupancy. The following shows the budgeted housekeeping costs per month at various occupancies: Number of occupied rooms Housekeeping costs 0-25 \ 1500 26-40 3000 41-55 4500 -What type of cost is housekeeping?

Beauregard Imports has pretax income of $75 000.If their tax rate is 35 per cent,what will be their after-tax income?

Tyson Manufacturing Tyson Manufacturing has the following cost information available for 2009: Direct materials \ 6.00 per unit Direct labour \ 2.00 per unit Variable manufacturing overhead \ 1.50 per unit Variable selling and administrative costs \ 3.00 per unit Fixed manufacturing overhead \ 40000 Fixed selling and administrative costs \ 50000 During 2009, Tyson produced 10 000 units out of which 9100 units were sold for $50 each. -What is net income under absorption costing?

As production goes up,total variable costs ____.

Jameson Inc.plans to double its rental space next year,which will increase its fixed costs by 40 per cent.Current year costs include variable costs of $3 per unit and fixed costs of $40 000.With the expansion of the rental space,next year's production is expected to be 10 000 units. Required: Calculate total estimated costs for next year.

Which of the following line descriptions would not be found on an income statement prepared using absorption costing?

Portia's Salon is contemplating an increase in their rental space that will result in a before-tax rent increase of $1000 per month.If their tax rate is 30 per cent,what is the after-tax monthly increase in rent cost?

A manager is considering a special project.Corporate policy dictates that all special projects must generate an after-tax profit of $21 000.If the company expects costs related to the project to be equal to $43 000,what is the before-tax cash sales price that should be charged in order to adhere to corporate policy assuming the company has a tax rate of 30 per cent?