{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

chapter 6 solutions

# chapter 6 solutions - CHAPTER 6 Activity Analysis Cost...

This preview shows pages 1–3. Sign up to view the full content.

CHAPTER 6 Activity Analysis, Cost Behaviour, and Cost Estimation 6 36 (25 MINUTES) 1. Machine supplies: \$153,000 ÷ 34,000 direct labour hours = \$4.50 per hour So for April we have: 23,000 direct labour hours x \$4.50 = \$103,500 Depreciation: Fixed at \$22,500 2. Plant maintenance cost: April (23,000 hours) June (34,000 hours) Total cost*……………………. . \$ 681,000 \$ 879,000 Less: Machine supplies……. (103,500) (153,000) Depreciation…………. . (22,500) (22,500) Plant maintenance…………. .. \$ 555,000 \$ 703,500 * Excludes supervisory labour cost Variable maintenance cost = difference in cost ÷ difference in direct labour hours = (\$703,500 – \$555,000) ÷ (34,000 – 23,000) = \$148,500 ÷ 11,000 hours = \$13.50 per hour Fixed maintenance cost: April (23,000 hours) June (34,000 hours) Total maintenance cost. ................................... \$555,000 \$703,500 Less: Variable cost at \$13.50 per hour. ............ 310,500 459,000 Fixed maintenance cost. ................................... \$244,500 \$244,500

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

View Full Document
6 36 (CONTINUED) 3. Manufacturing overhead at 29,500 labour hours: Machine supplies at \$4.50 per hour . ...................... \$132,750 Depreciation. ........................................................... 22,500 Plant maintenance cost: Variable at \$13.50 per hour. ............................. 398,250 Fixed. ................................................................. 244,500 Supervisory labour. ................................................. 135,000 Total. ........................................................... \$933,000 4. A fixed cost remains constant when a change occurs in the cost driver (or activity base). A step fixed cost, on the other hand, remains constant within a range but will change (rise or fall) when activity falls outside that range. In other words, a fixed cost is constant over a wider range of activity than a step fixed cost. 5.
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

### Page1 / 10

chapter 6 solutions - CHAPTER 6 Activity Analysis Cost...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document
Ask a homework question - tutors are online