acc 640 - Homework #2

# acc 640 - Homework #2 - ACT 640 HOMEWORK #2 #3-32: 1. G...

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ACT 640 HOMEWORK #2 #3-32: 1. G – Cost driver: machine labor 2. B – Cost driver: quantity of scarce raw material 3. E – Cost driver: annual wage 4. F – Cost driver: gallons of water 5. A – Cost driver: quantity of discounts 6. D – Cost driver: the length of time (days, months, years, etc) 7. H – Cost driver: sheet steel 8. F – Cost driver: phone solicitors 9. C – Cost driver: cubic feet used #3-34: 1. Operating income = Revenue – Operating expenses Operating expenses = Revenue – Operating Income => Operating expenses in Q1-2001 = \$57m – (- \$19m) = \$76m => Operating expenses in Q2-2002 = \$116m - \$18m = \$98m 2. Let x be the percentage of sales that sale*x = variable cost 57x + FC = 76 116x + FC = 98 116x – 57x = 22 x = 0.37288 FC = 54.75 TC = 54.75 – 0.37288*Sales 3. The operating income could increase by \$37m with an increase in sales of \$59m while it had an operating loss of \$19m on its \$57m of sales in the first quarter of 2001 because of the fix cost per unit. The variable cost per unit is unchanged but

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## acc 640 - Homework #2 - ACT 640 HOMEWORK #2 #3-32: 1. G...

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