PracticeChapter03

# PracticeChapter03 - CHAPTER 3 32 1 2 3 4 5 6 7 8 Driver for...

This preview shows pages 1–4. Sign up to view the full content.

CHAPTER 3 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 [\$350,000 + \$2.20(50,000)]/50,000; [\$350,000 + \$2.20(100,000)]/100,000. b \$350,000/50,000; \$350,000/100,000. c Given in cost formula. 3–2 Concluded The unit cost increases in the first case and decreases in the second. This is because fixed costs are spread over fewer units in the first case and over more units in the second. The unit variable cost stays constant. 32

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
3–6 1. Yes, there appears to be a linear relationship. 2. Low: 700, \$2,628 High: 3,100, \$6,564 V = ( Y 2 Y 1 )/( X 2 X 1 ) = (\$6,564 – \$2,628)/(3,100 – 700) = \$3,936/2,400 = \$1.64 per visit F = \$6,564 – \$1.64(3,100) = \$1,480 OR F = \$2,628 – \$1.64(700) = \$1,480 Y = \$1,480 + \$1.64 X 3. Y = \$1,480 + \$1.64(1,900) = \$1,480 + \$3,116 = \$4,596 3–7 33 Scattergraph for Tanning Services 0 1,00 0 2,00 0 3,000 4,00 0 5,00 0 6,000 \$7,000 0 1,00 0 2,00 0 3,00 0 4,00 0 Number of tanning visits Cos t
1. Regression output from spreadsheet program: SUMMARY OUTPUT Regression Statistics

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

### What students are saying

• As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

Kiran Temple University Fox School of Business ‘17, Course Hero Intern

• I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

Dana University of Pennsylvania ‘17, Course Hero Intern

• The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

Jill Tulane University ‘16, Course Hero Intern