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HW6_7_8_9sol - ACG 2071 Homework Problems Problem 6 A TC =...

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ACG 2071 Homework Problems Problem 6 A. TC = VC x + FC Product FC = $0.60*1,800 = $1,080 at 1800 units. Period FC = $1.30*1,800 = $2,340 at 1800 units. Product FC $1,080 Period FC 2,340 Product VC ($4.00*1,800) 7,200 Period VC ($1.10*1,800) 1,980 Total cost $12,600 B. Sales ($15*1,800) $27,000 CGS: VC product $7,200 FC product (see part A) 1,080 8,280 Gross profit $18,720 C. Sales ($15*1,800) $27,000 VC product $7,200 VC period 1,980 9,180 Contribution margin $17,820 D. Income before taxes is the same as operating income which is the same regardless if the full costing or variable costing approach is used. Sales ($15*1,800) $27,000 VC product $7,200 VC period 1,980 9,180 Contribution margin $17,820 FC product 1,080 FC period 2,340 3,420 Operating income (income before taxes) $14,400 Problem 7 Utilties: March $7,650/5,100 = $1.50 April $8,700/5,800 = $1.50 Shipping March $13,000/2,500 = $5.20 April $14,000/3,100 = $4.52 Utilities cannot be fixed because the total costs differ at the two activity levels. This cos variable because the cost per unit is the same at each activity level .
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Problem 8 A Account analysis because there is only one level of activity. B $161,000 32,000 28,000 Electric power to move conveyor belt 72,000 Total variable cost $293,000 Variable cost per unit = $292,000/70,000 = $4.18571 C
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