hw_2.1_afm_wkey(1) - ACCOUNTING FOR MANAGERS HOMEWORK SET...

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ACCOUNTING FOR MANAGERS – HOMEWORK SET #2 (partial) Cost Accounting Concepts and Analysis of Costs 1. Bill Pope has developed a new device that is so exciting he is considering quitting his job in order to produce and market it on a large-scale basis. Bill will rent a garage for $300 per month for production purposes. Utilities will cost $40 per month. Bill has already taken an industrial design course at the local community college to help prepare for this venture. The course cost $300. Bill will rent production equipment at a monthly cost of $800. He estimates the material cost per unit will be $5, and the labor cost will be $3. He will hire workers and spend his time promoting the product. To do this he will quit his job which pays $3,000 per month. Advertising and promotion will cost $900 per month. Required: Complete the chart below by placing an "X" under each heading that helps to identify the cost involved. There can be "Xs" placed under more than one heading for a single cost, e.g., a cost might be a sunk cost, an overhead cost and a product cost; there would be an "X" placed under each of these headings opposite the cost. * Between the alternatives of going into business to make the device or not going into business to make the device.
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2. Lettman Corporation has provided the following partial listing of costs incurred during November: Required: a. What is the total amount of product cost listed above? Show your work. b. What is the total amount of period cost listed above? Show your work. 3. A number of costs and measures of activity are listed below. Required: For each item above, indicate whether the cost is MAINLY fixed or variable with respect to the possible measure of activity listed next to it.
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4. Utility costs at one of Helker Corporation's factories are listed below: Management believes that utility cost is a mixed cost that depends on machine-hours. Required:
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This note was uploaded on 12/22/2011 for the course ACCOUNTING 0122008006 taught by Professor Muliady during the Spring '08 term at Universitas Pelita Harapan.

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hw_2.1_afm_wkey(1) - ACCOUNTING FOR MANAGERS HOMEWORK SET...

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