LN05-ch05-solutions-classroom-AFM102s08

# LN05-ch05-solutions-classroom-AFM102s08 - Exercise 58(20...

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Exercise 5-8  (20 minutes) 1. Guest- Days Custodial Supplies Expense High activity level (July). ................. 12,000 \$13,500 Low activity level (March). ..............   4,000           7,500     Change. ..........................................   8,000     \$      6,000     Variable cost element:   Change in expense Change in activity = \$6,000 8,000 guest-days =\$0.75 per guest-day Fixed cost element: Custodial supplies expense at high activity level. .... \$13,500 Less variable cost element:  12,000 guest-days x \$0.75 per guest-day. ............       9,000     Total fixed cost. ........................................................ \$ 4,500 The cost formula is \$4,500 per month plus \$0.75 per guest-day or  Y = \$4,500 + \$0.75 X. 2. Custodial supplies expense for 11,000 guest-days: Variable cost:  11,000 guest-days x \$0.75 per guest-day. .. \$  8,250 Fixed cost. .....................................................       4,500     Total cost. ...................................................... \$12,750  chapter 5 page 1 of 7

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Problem 5-13  (45 minutes) 1. Cost of goods sold. .................. Variable Advertising expense. ............... Fixed Shipping expense. ................... Mixed Salaries and commissions. ...... Mixed Insurance expense. ................. Fixed Depreciation expense. ............. Fixed 2. Analysis of the mixed expenses: Units Shipping  Expense Salaries and  Commission  Expense High level of activity. ...... 5,000 A\$38,000 A\$90,000 Low level of activity. ....... 4,000     34,000         78,000     Change. ......................... 1,000 A\$       4,000     A\$12,000 Variable cost element:   Variable rate= Change in cost     Change in activity Shipping expense:  A\$4,000 1,000 units =A\$4 per unit. Salaries and Commission Expense:
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LN05-ch05-solutions-classroom-AFM102s08 - Exercise 58(20...

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