In-Class Demos2

# In-Class Demos2 - In-Class Exercises Connect Exercise 2-1B...

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Connect In-Class Exercises

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Exercise 2-1B Identifying cost behavior LO 1 Parker Copies Company provides professional copying services to customers through the 35 copy stores it operates in the southwestern United States. Each store employs a manager and four assistants. The manager earns \$4,000 per month plus a bonus of 3 percent of sales. The assistants earn hourly wages. Each copy store costs \$3,000 per month to lease. The company spends \$5,000 per month on corporate-level advertising and promotion. Required Classify each of the following costs incurred by Parker Copies as fixed, variable, or mixed: a. Lease cost relative to the number of stores. b. Advertising and promotion costs relative to the number of copies a particular store makes. c. Lease cost relative to the number of copies made for customers. d. Assistants' wages relative to the number of copies made for customers. Exercise 2-1B Fixed Variable Variable Mixed
Exercise 2-2A Identifying cost behavior LO 1 At the various activity levels shown, Ambrose Company incurred the costs below. Required: Identify each of these costs as fixed, variable, or mixed. a Fixed b h.Fix ed e c Variable d Variable g. Variable f Mixed f Mixed j. Variable

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Estimating fixed and variable costs using the high-low method LO 7 Knox Boat Company makes inexpensive aluminum fishing boats. Production is seasonal, with considerable activity occurring in the spring and summer. Sales and production tend to decline in the fall and winter months. During 2011, the high point in activity occurred in June when it produced 200 boats at a total cost of \$140,000. The low point in production occurred in January when it produced 40 boats at a total cost of \$44,000. Required a. Use the high-low method to estimate the amount of fixed cost incurred each month by Knox Boat Company. Exercise 2-16A
Estimating fixed and variable costs using the high-low method LO 7 Knox Boat Company makes inexpensive aluminum fishing boats. Production is seasonal, with considerable activity occurring in the spring and summer. Sales and production tend to decline in the fall and winter months. During 2011, the high point in activity occurred in June when it produced 200 boats

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## This note was uploaded on 02/22/2012 for the course BUAD 2050 taught by Professor Nicholasw.schroeder during the Spring '09 term at Toledo.

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In-Class Demos2 - In-Class Exercises Connect Exercise 2-1B...

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