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As s ignm ent: HW Set #2 - E3.10, E3.19, E16.16, E16. eBook eBook eBook eBook Exercise 3 .1 0 C o s t Be h a vio r Smo ke C ity, In c., ma n u fa ctu...

Management Accounting problem
Assignment: HW Set #2 - E3.10, E3.19, E16.16, E16.20 1. Exercise 3.10 Cost Behavior SmokeCity, Inc., manufactures barbeque smokers. Based on past experience, SmokeCity has found that its total annual overhead costs can be represented by the following formula: Overhead cost = $543,000 + $1.34X, where X equals number of smokers. Last year, SmokeCity produced 20,000 smokers. Actual overhead costs for the year were as expected. Required: 1. What is the driver for the overhead activity? _________________ For questions 2-4, Enter the final answers rounded to the nearest dollar. 2. What is the total overhead cost incurred by SmokeCity last year? $ _________________ 3. What is the total fixed overhead cost incurred by SmokeCity last year? $ _________________ 4. What is the total variable overhead cost incurred by SmokeCity last year? $ _________________ For questions 5-8, round your answers to the nearest cent. Use those rounded figures in subsequent computations, if necessary. 5. What is the overhead cost per unit produced? $ _________________ per unit 6. What is the fixed overhead cost per unit? $ _________________ per unit 7. What is the variable overhead cost per unit? $ _________________ per unit 8. Recalculate Requirements 5, 6, and 7 for the following levels of production: (a) 19,500 units and (b) 21,600 units. 19,500 Units 21,600 Units Unit cost $ _________________ $ _________________ eBook eBook eBook eBook
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Unit fixed cost _________________ _________________ Unit variable cost _________________ _________________ The reason the unit costs changed in the way they did is because: _________________ 2. Exercise 3.19 High-Low Method, Cost Formulas The controller of the South Charleston plant of Ravinia, Inc., monitored activities associated with materials handling costs. The high and low levels of resource usage occurred in September and March for three different resources associated with materials handling. The number of moves is the driver. The total costs of the three resources and the activity output, as measured by moves for the two different levels, are presented as follows: Required: If required, round your answers to two decimal places. Enter a "0" if required. 1. Determine the cost behavior formula of each resource. Use the high-low method to assess the fixed and variable components. Forklift depreciation: V $ _________________ F $ _________________ Y $ _________________ Indirect labor: V $ _________________ eBook eBook eBook eBook
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Solution :Exercise 3.10
1 The driver for overhead activity is number of smokers . 2 Calculation of total overhead cost incurred by Smoke City last year
Overhead Cost = $543,000 + $1.34X
where X =...

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