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Pr 6-16 solution

# Pr 6-16 solution - Problem 6-16(45 minutes 1 Cost of goods...

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Unformatted text preview: Problem 6-16 (45 minutes) 1. Cost of goods sold.................... Variable Shipping expense..................... Mixed Advertising expense................. Fixed Salaries and commissions........ Mixed Insurance expense................... Fixed Depreciation expense............... Fixed 2. Analysis of the mixed expenses: Units Shipping Expense Salaries and Comm. Expense High level of activity...... 4,500 £56,000 £143,000 Low level of activity....... 3,000 44,000 107,000 Change......................... 1,500 £12,000 £ 36,000 Variable cost element: Change in cost Variable cost per unit = Change in activity £12,000 Shipping expense: = £8 per unit 1,500 units £36,000 Salaries and comm. expense: = £24 per unit 1,500 units Fixed cost element: Shipping Expense Salaries and Comm. Expense Cost at high level of activity..... £56,000 £143,000 Less variable cost element: 4,500 units × £8 per unit.......4,500 units × £8 per unit....
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Pr 6-16 solution - Problem 6-16(45 minutes 1 Cost of goods...

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