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6_takehome_chapter 3_fall 2010_soln

# 6_takehome_chapter 3_fall 2010_soln - Acc 200 Take-home...

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Acc 200 Take-home Quiz Chapter 3 (Managerial Accounting) Solution PROBLEM I: (15 pts) Richardson Corporation plans to increase its advertising budget by 20% next year. The company currently spends \$15,000 on advertising costs. In addition to advertising, Richardson spends \$50,000 per year for other fixed costs and \$10 per unit for variable costs. Required : If Richardson anticipates producing 30,000 units next year, what will be next year’s estimated total costs? Answer: \$_ 368,000 ______ Total Costs = Fixed Costs + Variable Cost per Unit (x) Total Costs = \$68,000 * + \$10 (30,000) * FC = [15,000 + .20(15,000)] + \$50,000 = \$68,000 PROBLEM II : (70 pts) Reliable Movers Inc. documented the miles driven and total moving van costs for the past five months as follows: Number of Miles Total Vehicle Costs January 3,000 \$ 4,800 February 3,500 5,200 March 5,000 6,100 April 4,000 5,000 May 6,000 6,000 A. Which two months exhibit the high and low activity levels? High: ___ May __________ _ Low: ___ Jan ___________ B. What is the variable cost per mile? Answer: \$_

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6_takehome_chapter 3_fall 2010_soln - Acc 200 Take-home...

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