A7fe After analyzing expenses, the company has determined the following costABDEF3 Budgeted information for Quarter 1 of Year 3:4Sales in units17,0005 Sales price per unit48.0067 After analyzing expenses, the company has determined the following cost patterns.Cost of goods sold9 Sales commissions829.00 per unit9.50% per dollar of sales1011Administrative salaries$45,000.00 per quarter12Rent expense27,000.00 per quarter13Depreciation expense2$36,000.00 per quarter1415 Management has concluded that shipping expense is a mixed cost. Units shipped and the related shipping cost overthe last eight quarters are:1617 Year 1Total Shipping CostUnits18 Quarter 1$67,000.0012,50019Quarter2$94,000.0021,00020Quarter 389,800.0013,80021 Quarter 492,600.0020,00022 Year 223Quarter 1$72,500.0013,70024Quarter280.000.0014.000>%24%24 A7feAfter analyzing expenses, the company has determined the following costАBF25Quarter 3$84,000.0014,30026Quarter 4100,000.0022,5002728 Use the data to answer the following.2930 1. Using the high-low method, determine a cost formula for shipping expenses.3132Total Shipping CostUnits33 High level of activity34 Low level of activity35 Change in activity3637 Variable costper unit3839 Compute the fixed cost portion using the high level of activity.Total cost at high level of activity4041Less: Variable cost element42 Total fixed cost43442. Prepare a contribution format income statement for Quarter 1 of Year 3.4546Jay Corporation47Budgeted Contribution Format Income Statement

The budgeted income statement determines the budgeted net income of the business by subtracting the…

Answered: 1 of Year 3: 17,000 48.00 pany has…

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

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Pricing

Pricing is used as a term in finance and economics, pricing is the process of fixing a value for a product or a service. Pricing establishes a value for a product or service that the customer has to pay. A business can choose from different strategies while deciding to set prices.

Question

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

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