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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