Ch03HomeworkSolutionsPlus

# Ch03HomeworkSolutionsPlus - CHAPTER 3 COST BEHAVIOR...

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COST BEHAVIOR EXERCISES 3–1 Activity Cost Behavior Driver a. Machining Variable Machine hours b. Assembling Variable Units produced c. Selling goods Fixed Units sold d. Selling goods Variable Units sold e. Moving goods Variable Number of moves f. Storing goods Fixed Square feet g. Moving materials Fixed Number of moves h. X-raying patients Variable Number of x-rays i. Transporting clients Mixed Miles driven j. Repairing teeth Variable Number of fillings k. Setting up equipment Mixed Number of setups l. Filing claims Variable Number of claims m. Maintaining equipment Mixed Maintenance hours n. Selling products Variable Number of circulars o. Purchasing goods Mixed Number of orders 3–2 1. Driver for overhead activity: Number of speakers 2. Total overhead cost = \$350,000 + \$2.20(70,000) = \$504,000 3. Total fixed overhead cost = \$350,000 4. Total variable overhead cost = \$2.20(70,000) = \$154,000 5. Unit cost = \$504,000/70,000 = \$7.20 per unit 6. Unit fixed cost = \$350,000/70,000 = \$5.00 per unit 7. Unit variable cost = \$2.20 per unit 8. a. and b. 50,000 Units 100,000 Units Unit cost a \$9.20 \$5.70 Unit fixed cost b 7.00 3.50 Unit variable cost c 2.20 2.20 a

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## Ch03HomeworkSolutionsPlus - CHAPTER 3 COST BEHAVIOR...

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