Ch 10 Solutions Horngren 13
th
Edition
10-18
(20 min.)
Various cost-behavior patterns.
1.
K
2.
B
3.
G
4.
J
Note that A is incorrect because, although the cost per pound eventually equals a
constant at $9.20, the total dollars of cost increases linearly from that point
onward.
5.
I
The total costs will be the same regardless of the volume level.
6.
L
7.
F
This is a classic step-cost function.
8.
K
9.
C
10-19
(30 min.)
Matching graphs with descriptions of cost and revenue behavior.
a.
(1)
b.
(6)
A step-cost function.
c.
(9)
d.
(2)
e.
(8)
f.
(10)
It is
data plotted
on a scatter diagram, showing a linear variable cost function with
constant variance of residuals. The constant variance of residuals implies that
there is a uniform dispersion of the data points about the regression line.
g.
(3)
h.
(8)
10-22
(30 min.)
Account analysis method.
1.
Manufacturing cost classification for 2009:
Account
Total
Costs
(1)
% of
Total Costs
That is
Variable
(2)
Variable
Costs
(3) = (1)
×
(2)
Fixed
Costs
(4) = (1) – (3)
Variable
Cost per Unit
(5) = (3) ÷ 75,000
Direct materials
Direct manufacturing labor
Power
Supervision labor
Materials-handling labor
Maintenance labor
Depreciation
Rent, property taxes, admin
$300,000
225,000
37,500
56,250
60,000
75,000
95,000
100,000
100%
100
100
20
50
40
0
0
$300,000
225,000
37,500
11,250
30,000
30,000
0
0
$
0
0
0
45,000
30,000
45,000
95,000
100,000
$4.00
3.00
0.50
0.15
0.40
0.40
0
0
Total
$948,750
$633,750
$315,000
$8
.45
Total manufacturing cost for 2009 = $948,750
10-1