{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Solved Problems-chapters5and6

Solved Problems-chapters5and6 - ACC601/SolvedProblems...

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

View Full Document Right Arrow Icon
ACC601/Solved Problems Chapter 5 Problem 5-12  (page 220 of your textbook) 1. Cost of goods sold ................... Variable Advertising expense ................ Fixed Shipping expense .................... Mixed Salaries and commissions ....... Mixed Insurance expense .................. Fixed Depreciation expense .............. Fixed 2. Analysis of the mixed expenses: Units Shipping  Expense Salaries and  Commission  Expense High level of activity ....... 5,000 A$38,000 A$90,000 Low level of activity ........ 4,000     34,000         78,000     Change .......................... 1,000 A$       4,000     A$12,000 Variable cost element: Change in cost     Variable rate= Change in activity A$4,000 Shipping expense:  = A$4 per unit. 1,000 units A$12,000 Salaries and Commission Expense:  = A$12 per unit. 1,000 units Fixed cost element: Shipping  Expense Salaries and  Commission  Expense Cost at high level of activity .... A$38,000 A$90,000 Less variable cost element: 5,000 units  ×  A$4 per unit ....   20,000 5,000 units  ×  A$12 per unit. .                                 60,000    
Image of page 1

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

View Full Document Right Arrow Icon
Fixed cost element .................. A$18,000 A$30,000
Image of page 2
The cost formulas are: Shipping expense:  A$18,000 per month plus A$4 per unit  or  Y = A$18,000 + A$4 X. Salaries and Comm. expense: A$30,000 per month plus A$12 per unit or Y = A$30,000 + A$12 X. 3. Morrisey & Brown, Ltd. Income Statement For the Month Ended September 30 Sales revenue  (5,000 units  ×  A$100 per unit) ................... A$500,000 Less variable expenses: Cost of goods sold  (5,000 units  ×   A$60 per unit) ................. A$300,000 Shipping expense  (5,000 units  ×  A$4 per unit) .................... 20,000 Salaries and commissions expense  (5,000 units  ×  A$12 per unit) ...................           60,000           380,000     Contribution margin ...................................... 120,000 Less fixed expenses: Advertising expense .................................. 21,000 Shipping expense ...................................... 18,000 Salaries and commissions expense .......... 30,000 Insurance expense .................................... 6,000 Depreciation expense ................................           15,000               90,000  
Image of page 3

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

View Full Document Right Arrow Icon
Image of page 4
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    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.

    Student Picture

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

  • Left Quote Icon

    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.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    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.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern