5. Alexander owns an art gallery. He accepts paintings and sculpture on consignment and then receives 20 percent of the price of each piece as his fee. Space is limited, and there are costs involved, so Alexander is careful about accepting artists. When he does accept one, he arranges for an opening show (usually for three hours on a weekend night) and sends out invitations to his customer list. At the opening, he serves soft drinks and casual munchies to create a comfortable environment for prospective customers to view the new works and chat with the artist. On average, each opening costs P500. Alexander has given as many as 20 opening shows in a year. The total cost of running the gallery, including rent, furniture and fixtures, utilities, and a part-time assistant, amounts to P80,000 per year. REQUIRED: 1. If the cost driver is the number of opening shows given, classify the following costs as either strictly variable cost, a fixed cost, or a mixed cost: a. The cost of giving opening shows b. The cost of running the gallery c. Alexander's total costs (the sum of the costs of giving opening shows and running the gallery)

5. Alexander owns an art gallery. He accepts paintings and sculpture on consignment and then receives 20 percent of the price of each piece as his fee. Space is limited, and there are costs involved, so Alexander is careful about accepting artists. When he does accept one, he arranges for an opening show (usually for three hours on a weekend night) and sends out invitations to his customer list. At the opening, he serves soft drinks and casual munchies to create a comfortable environment for prospective customers to view the new works and chat with the artist. On average, each opening costs P500. Alexander has given as many as 20 opening shows in a year. The total cost of running the gallery, including rent, furniture and fixtures, utilities, and a part-time assistant, amounts to P80,000 per year. REQUIRED: 1. If the cost driver is the number of opening shows given, classify the following costs as either strictly variable cost, a fixed cost, or a mixed cost: a. The cost of giving opening shows b. The cost of running the gallery c. Alexander's total costs (the sum of the costs of giving opening shows and running the gallery)

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter3: Cost Behavior And Cost Forecasting

Section: Chapter Questions

Problem 43E

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5. Alexander owns an art gallery. He accepts paintings and sculpture on consignment and then receives 20 percent of the price of each piece as his fee. Space is limited, and there are costs involved, so Alexander is careful about accepting artists. When he does accept one, he arranges for an opening show (usually for three hours on a weekend night) and sends out invitations to his customer list. At the opening, he serves soft drinks and casual munchies to create a comfortable environment for prospective customers to view the new works and chat with the artist. On average, each opening costs P500. Alexander has given as many as 20 opening shows in a year. The total cost of running the gallery, including rent, furniture and fixtures, utilities, and a part-time assistant, amounts to P80,000 per year. REQUIRED: 1 2. Assume that the cost driver is number of opening shows. Develop the cost formula f. - gallery's costs for a year. n VI * uyu TUI u 3. Using the formula developed in Requirement…
Would Qualifying an Indorsement Be Ethical? Suppose you have taken a promissory note for $3,500 payable in 12 months with interest at 10 percent as payment for some carpentry work you did for a friend. You have some reason to believe the maker of the note is in financial difficulty and may not be able to pay the note when it is due. You discuss with an elderly neighbor the possibility of her buying the note from you as an investment, and she agrees to buy it from you for $3,000. Would it be ethical for you to indorse the note with a qualified indorsement ("without recourse")?
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Which one of the following statements is false? Group of answer choices A.Bill drives 20 each way between his home to his office – 40 miles round trip each day. During the day he drives to a client site. He drives a total of 63 miles that day. He may deduct the cost of 43 miles. B.Commuting expenses may be deductible if you are transporting tools. C.A consultant works out of her home. She may deduct the cost of driving to a client’s place of business. D.The expenses of driving between your regular job and a second job are deductible.
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Coby is plumber who engages Peter to buy materials on his behalf. Peter is given a limit of $1,500 on purchases that he makes on Coby’s behalf. U-Bend Pty Ltd is a wholesaler of PVC piping from whom Peter has purchased pipes before . The company was selling piping at a discount price. Peter purchase a quantity of this piping for $2,000 and arranged for delivery. Peter thought it was too good a deal to pass up, even though it was in excess of his limit of $1,500 . Coby is refusing to accept the delivery of the pipes from U- Bend Pty Ltd Under Agency Law, will Coby be bound by the purchase?
Jack owns a shop that sells furniture. He placed an advertisement in the Friday’s edition of the local paper stating: “Sale on all furniture 25% discount. Offer valid for one day only – tomorrow Saturday- Cash Only”. Nick saw previously a dining table with 6 chairs when he visited the shop during the week. However, he could not purchase it at that time because the prices was quite steep. He has in his possession the ID number and details of the dining table. When he saw the advertisement on Local paper, he immediately posted a letter of acceptance, since a 25% discount is a bargain for him. On the Saturday of the sale, Diana saw a wooden stool and made an offer to Jack. Diana then asked Jack if he would take a cheque for her purchase, Jack advised her that he cannot accept any cheque – Cash only. On the following Monday morning, Nick’s letter arrived. In the context of the rules governing the creation of contracts: (a) Describe the precise legal nature of Jack’s advertisement;…
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