bambersm_ch06

bambersm_ch06 - Chapter 6 Cost Behavior Τ Chapter Review...

Info iconThis preview shows pages 1–8. Sign up to view the full content.

View Full Document Right Arrow Icon

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

View Full DocumentRight Arrow Icon

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

View Full DocumentRight Arrow Icon

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

View Full DocumentRight Arrow Icon

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

View Full DocumentRight Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Chapter 6 Cost Behavior Τ Chapter Review Quiz Answers: 1. b 3. d 5. c 7. d 9. a 2. a 4. d 6. b 8. c 10. c Τ Short Exercises (5-10 min.) S 6-1 a. Depreciation on equipment used to cut wood enclosures…………………………………………… Fixed b. Wood for speaker enclosures………………………. Variable c. Patents on crossover relays………………………… Fixed d. Crossover relays………………………………………. Variable e. Grill cloth……………………………………………….. Variable f. Glue……………………………………………………… Variable g. Quality inspector’s salary……………………………. Fixed Chapter 6 Cost Behavior 97 (10 min.) S 6-2 Managerial Accounting Class-Test Edition On each of the following graphs, the y-axis is “Total Cost” and the x-axis is “Volume of Activity” a. Step b. Fixed c. Curvilinear e. Variable d. Mixed (Any curved line) Y X Y X Y Y Y X X X 98 (5-10 min.) S 6-3 Total fixed cost = $3.00 / basketball × 12,000 basketballs Total fixed cost = $36,000 Since a volume of 15,000 basketballs is in the same relevant range, the total fixed costs will remain constant at $36,000 Therefore, the new fixed cost per basketball will be: Fixed cost per basketball = Total fixed cost Number of basketballs produced Fixed cost per basketball = $36,000 15,000 Fixed cost per basketball = $2.40 Chapter 6 Cost Behavior Total Fixed Cost 12,000 15,000 $36,000 99 Number of Basketballs produced (5-10 min.) S 6-4 a. Fixed y = f Where y = total fixed cost f = fixed amount over a period of time (vertical intercept) b. Mixed y = vx + f Where y = total mixed cost v = variable cost per unit of activity (slope) x = volume of activity f = fixed amount over a period of time (vertical intercept) c. Variable y = vx Where y = total variable cost v = variable cost per unit of activity (slope) x = volume of activity Managerial Accounting Class-Test Edition 100 (5-10 min.) S 6-5 Cost A is a variable cost. The cost is constant on a per unit basis and increases in total as volume increases. Cost B is a fixed cost. The cost is constant in total, and decreases on a per unit basis as volume increases. Cost C is mixed. It is not constant in total, and it is not constant on a per unit basis. Chapter 6 Cost Behavior 101 (5-10 min.) S 6-6 Req. 1 a. Call for 20 minutes $5.00 + (20 × $0.35) $5.00 + $7.00 = $12.00 b. Call for 40 minutes $5.00 + (40 × $0.35) $5.00 + $14.00 = $19.00 c. Call for 80 minutes $5.00 + (80 × $0.35) $5.00 + $28.00 = $33.00 Req. 2 Managerial Accounting Class-Test Edition 102 (5-10 min.) S 6-7 Find the answer to Ritter Razor’s questions by 1) finding the company’s cost equation, and then 2) using the cost equation to predict total costs at a different volume....
View Full Document

This note was uploaded on 04/08/2008 for the course ACCT 1302 taught by Professor Venkateswar during the Spring '08 term at Trinity U.

Page1 / 73

bambersm_ch06 - Chapter 6 Cost Behavior Τ Chapter Review...

This preview shows document pages 1 - 8. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online