Westinghouse Company manufactures major appliances. Because of growing interest in its product, it has just had its most successful year. In preparing the Chapter 2 Cost - Concepts and C!assification Concepts and C!assification Given the following facts, complete the requirements below: 41 Problem 8 Westinghouse Company manufactures major appliances. VOLUME IN MACH. HRS. ELECTRICITY COST MONTH JULY AUGUST SEPTEMBER ОСТОВER NOVEMBER DECEMBER 6-MONTH TOTAL 6,000 5,000 4,500 4,000 P 60,000 53,000 49,500 46,000 42,500 39,000 P290,000 3.500 3,000 26.000 Using the high-low method compute 1 The variable cost per machine hour 2 The monthly fixed electricity costs 3 The total electricity costs if 4,800 machine hours are projected to be used next month

Westinghouse Company manufactures major appliances. Because of growing interest in its product, it has just had its most successful year. In preparing the Chapter 2 Cost - Concepts and C!assification Concepts and C!assification Given the following facts, complete the requirements below: 41 Problem 8 Westinghouse Company manufactures major appliances. VOLUME IN MACH. HRS. ELECTRICITY COST MONTH JULY AUGUST SEPTEMBER ОСТОВER NOVEMBER DECEMBER 6-MONTH TOTAL 6,000 5,000 4,500 4,000 P 60,000 53,000 49,500 46,000 42,500 39,000 P290,000 3.500 3,000 26.000 Using the high-low method compute 1 The variable cost per machine hour 2 The monthly fixed electricity costs 3 The total electricity costs if 4,800 machine hours are projected to be used next month

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter3: Cost Behavior

Section: Chapter Questions

Problem 5CE: Refer to Cornerstone Exercise 3.4 for data on Dohini Manufacturing Companys purchasing cost and...

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Refer to Cornerstone Exercise 3.4 for data on Dohini Manufacturing Companys purchasing cost and number of purchase orders. The controller for Dohini Manufacturing ran regression on the data, and the coefficients shown by the regression program are: Required: 1. Construct the cost formula for the purchasing activity showing the fixed cost and the variable rate. 2. If Dohini Manufacturing Company estimates that next month will have 430 purchase orders, what is the total estimated purchasing cost for that month? (Round your answer to the nearest dollar.) 3. What if Dohini Manufacturing wants to estimate purchasing cost for the coming year and expects 5,340 purchase orders? What will estimated total purchasing cost be? (Round your answer to the nearest dollar.) What is the total fixed purchasing cost? Why doesnt it equal the fixed cost calculated in Requirement 1?
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As a newly hired management accountant, you have been asked to prepare a profit plan for the company for which you work. As part of this task, you've been asked to do some what-if analyses. Following is the budgeted information regarding the coming year: Selling price per unit Variable cost per unit Fixed costs (per year) $ 100.00 70.00 1,200,000 Required: 1. What is the breakeven volume, in units and dollars, for the coming year? 2. Assume that the goal of the company is to earn a pretax (operating) profit of $300,000 for the coming year. How many units would the company have to sell to achieve this goal? 3. Assume that of the $70 variable cost per unit the labor-cost component is $25. Current negotiations with the employees of the company indicate some uncertainty regarding the labor cost component of the variable cost figure presented above. What is the effect on the breakeven point in units if selling price and fixed costs are as planned, but the labor cost for the coming year is…
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