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1 of Year 3: 17,000 48.00 pany has determined the following cost pa 29.00 per unit 9.50% per doll 45,000.00 per qua 27,000.00 per qua $ 36,000.00 per qua %24

1 of Year 3: 17,000 48.00 pany has determined the following cost pa 29.00 per unit 9.50% per doll 45,000.00 per qua 27,000.00 per qua $ 36,000.00 per qua %24

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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A7 fe After analyzing expenses, the company has determined the following cost A B D E F 3 Budgeted information for Quarter 1 of Year 3: 4 Sales in units 17,000 5 Sales price per unit 48.00 6 7 After analyzing expenses, the company has determined the following cost patterns. Cost of goods sold 9 Sales commissions 8 29.00 per unit 9.50% per dollar of sales 10 11 Administrative salaries $ 45,000.00 per quarter 12 Rent expense 27,000.00 per quarter 13 Depreciation expense 2$ 36,000.00 per quarter 14 15 Management has concluded that shipping expense is a mixed cost. Units shipped and the related shipping cost over the last eight quarters are: 16 17 Year 1 Total Shipping Cost Units 18 Quarter 1 $ 67,000.00 12,500 19 Quarter2 $ 94,000.00 21,000 20 Quarter 3 89,800.00 13,800 21 Quarter 4 92,600.00 20,000 22 Year 2 23 Quarter 1 $ 72,500.00 13,700 24 Quarter2 80.000.00 14.000 > %24 %24
Transcribed Image Text:A7 fe After analyzing expenses, the company has determined the following cost A B D E F 3 Budgeted information for Quarter 1 of Year 3: 4 Sales in units 17,000 5 Sales price per unit 48.00 6 7 After analyzing expenses, the company has determined the following cost patterns. Cost of goods sold 9 Sales commissions 8 29.00 per unit 9.50% per dollar of sales 10 11 Administrative salaries $ 45,000.00 per quarter 12 Rent expense 27,000.00 per quarter 13 Depreciation expense 2$ 36,000.00 per quarter 14 15 Management has concluded that shipping expense is a mixed cost. Units shipped and the related shipping cost over the last eight quarters are: 16 17 Year 1 Total Shipping Cost Units 18 Quarter 1 $ 67,000.00 12,500 19 Quarter2 $ 94,000.00 21,000 20 Quarter 3 89,800.00 13,800 21 Quarter 4 92,600.00 20,000 22 Year 2 23 Quarter 1 $ 72,500.00 13,700 24 Quarter2 80.000.00 14.000 > %24 %24
A7 fe After analyzing expenses, the company has determined the following cost А B F 25 Quarter 3 $ 84,000.00 14,300 26 Quarter 4 100,000.00 22,500 27 28 Use the data to answer the following. 29 30 1. Using the high-low method, determine a cost formula for shipping expenses. 31 32 Total Shipping Cost Units 33 High level of activity 34 Low level of activity 35 Change in activity 36 37 Variable cost per unit 38 39 Compute the fixed cost portion using the high level of activity. Total cost at high level of activity 40 41 Less: Variable cost element 42 Total fixed cost 43 44 2. Prepare a contribution format income statement for Quarter 1 of Year 3. 45 46 Jay Corporation 47 Budgeted Contribution Format Income Statement
Transcribed Image Text:A7 fe After analyzing expenses, the company has determined the following cost А B F 25 Quarter 3 $ 84,000.00 14,300 26 Quarter 4 100,000.00 22,500 27 28 Use the data to answer the following. 29 30 1. Using the high-low method, determine a cost formula for shipping expenses. 31 32 Total Shipping Cost Units 33 High level of activity 34 Low level of activity 35 Change in activity 36 37 Variable cost per unit 38 39 Compute the fixed cost portion using the high level of activity. Total cost at high level of activity 40 41 Less: Variable cost element 42 Total fixed cost 43 44 2. Prepare a contribution format income statement for Quarter 1 of Year 3. 45 46 Jay Corporation 47 Budgeted Contribution Format Income Statement
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