A corporation has the following information for the first quarter of its year: Months Machine hours Cleaning expense January 2,100 February 2,600 March 1,600 $900 $1,200 $800 Using the high-low method, what is the corporation s fixed cost?

A corporation has the following information for the first quarter of its year: Months Machine hours Cleaning expense January 2,100 February 2,600 March 1,600 $900 $1,200 $800 Using the high-low method, what is the corporation s fixed cost?

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter7: Allocating Costs Of Support Departments And Joint Products

Section: Chapter Questions

Problem 30E: A company uses charging rates to allocate service department costs to the using departments. The...

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Finch Company began its operations on March 31 of the current year. Finch has the following projected costs: June $201,000 Manufacturing costs" Insurance expense** April May $157,200 $197,600 970 970 2,200 420 2,200 420 970 Depreciation expense Property tax expense*** "Of the manufacturing costs, three-fourths are paid for in the month they are incurred; one-fourth is paid in the following month. **Insurance expense is $970 a month; however, the insurance is paid four times yearly in the first month of the quarter, (.e., January, April, July, and October). ***Property tax is paid once a year in November. The cash payments expected for Finch Company in the month of May are O&$187.500 b. $39,300 Oe5148,200 Od $226,800 2,200 420
Finch Company began its operations on March 31 of the current year. Finch has the following projected costs: May $198,000 April $156,000 a. $49,500 b. $252,000 c. $202,500 d. $153,000 Manufacturing costs* Insurance expense** Depreciation expense Property tax expense*** *Of the manufacturing costs, three-fourths is paid for in the month they are incurred; one-fourth is paid in the following month. **Insurance expense is $900 a month; however, the insurance is paid four times yearly in the first month of the quarter (i.e., January, April, July, and October). ***Property tax is paid once a year in November. The cash payments for Finch Company expected in the month of June are 900 1,850 500 900 1,850 June 500 $204,000 900 1,850 500 Previous Next
Finch Company began its operations on March 31 of the current year. Finch has the following projected costs: April May June Manufacturing costs* $156,800 $195,200 $217,600 Insurance expense** 1,000 1,000 1,000 Depreciation expense 2,000 2,000 2,000 Property tax expense*** 500 500 500 *Of the manufacturing costs, three-fourths is paid for in the month they are incurred; one-fourth is paid in the following month.**Insurance expense is $1,000 a month; however, the insurance is paid four times yearly in the first month of the quarter (i.e., January, April, July, and October).***Property tax is paid once a year in November. The cash payments expected for Finch Company in the month of April are a.$120,600 b.$123,100 c.$121,100 d.$122,600
Finch Company began its operations on March 31 of the current year. Finch has the following projected costs: April May June Manufacturing costs* $156,800 $195,200 $217,600 Insurance expense** 1,000 1,000 1,000 Depreciation expense 2,000 2,000 2,000 Property tax expense*** 500 500 500 *Of the manufacturing costs, three-fourths is paid for in the month they are incurred; one-fourth is paid in the following month. **Insurance expense is $1,000 a month; however, the insurance is paid four times yearly in the first month of the quarter (i.e., January, April, July, and October).***Property tax is paid once a year in November. The cash payments expected for Finch Company in the month of April are Group of answer choices $120,600 $123,100 $121,100 $122,600
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Finch Company began its operations on March 31 of the current year. Finch has the following projected costs: April May $156,400 $196,500 $205,500 1,030 2,040 450 Manufacturing costs* Insurance expense** Depreciation expense Property tax expense*** *Of the manufacturing costs, three-fourths are paid for in the month they are incurred; one-fourth is paid in the following month. **Insurance expense is $1,030 a month; however, the insurance is paid four times yearly in the first month of the quarter (i.e., January, April, July, and October). ***Property tax is paid once a year in November. 1,030 June 2,040 450 1,030 2,040 450 The cash payments expected for Finch Company in the month of April are O a. $117,300 O b. $156,400 O c. $120,390 Od. $138,395
Finch Company began its operations on March 31 of the current year. Finch has the following projected costs: April May June Manufacturing costs* $160,000 $199,000 $206,600 Insurance expense** 1,050 1,050 1,050 Depreciation expense 2,160 2,160 2,160 Property tax expense*** 540 540 540 *Of the manufacturing costs, three-fourths are paid for in the month they are incurred; one-fourth is paid in the following month.**Insurance expense is $1,050 a month; however, the insurance is paid four times yearly in the first month of the quarter, (i.e., January, April, July, and October).***Property tax is paid once a year in November. The cash payments expected for Finch Company in the month of May are a.$189,250 b.$229,250 c.$40,000 d.$149,250
The phone bill for a corporation consists of both fixed and variable costs. Refer to the four-month data below and apply the high-low method to answer the question. Minutes Total Bill January 480 $4500 February 240 $2690 March 160 $2630 April 300 $2845 If the company uses 360 minutes in May, how much will the total bill be? (Round any intermediate calculations to the nearest cent and your final answer to the nearest dollar.) $1697 $2102 $3799 $7305
Finch Company began its operations on March 31 of the current year. Finch has the following projected costs: April May June $155,600 $192,800 $213,600 Manufacturing costs* Insurance expense** 880 Depreciation expense 2,180 Property tax expense*** 590 *Of the manufacturing costs, three-fourths is paid for in the month they are incurred; one-fourth is paid in the following month. **Insurance expense is $880 a month; however, the insurance is paid four times yearly in the first month of the quarter (i.e., January, April, July, and October). ***Property tax is paid once a year in November. 880 2,180 590 880 2,180 590 The cash payments expected for Finch Company in the month of May are O a. $183,500 O b. $144,600 Oc. $38,900 O d. $222,400
How would each of the following costs be classified if units produced is the activity base? a. Salary of factory supervisor ($120,000 per year) b. Straight-line depreciation of plant and equipment c. Property rent of $11,500 per month on plant and equipment
Customers as a Cost Object Morrisom National Bank has requested an analysis of checking account profitability by customer type. Customers are categorized according to the size of their account: low balances, medium balances, and high balances. The activities associated with the three different customer categories and their associated annual costs are as follows: Additional data concerning the usage of the activities by the various customers are also provided: Required: (Note: Round answers to two decimal places.) 1. Calculate a cost per account per year by dividing the total cost of processing and maintaining checking accounts by the total number of accounts. What is the average fee per month that the bank should charge to cover the costs incurred because of checking accounts? 2. Calculate a cost per account by customer category by using activity rates. 3. Currently, the bank offers free checking to all of its customers. The interest revenues average 90 per account; however, the interest revenues earned per account by category are 80, 100, and 165 for the low-, medium-, and high-balance accounts, respectively. Calculate the average profit per account (average revenue minus average cost from Requirement 1). Then calculate the profit per account by using the revenue per customer type and the unit cost per customer type calculated in Requirement 2. 4. CONCEPTUAL CONNECTION After the analysis in Requirement 3, a vice president recommended eliminating the free checking feature for low-balance customers. The bank president expressed reluctance to do so, arguing that the low-balance customers more than made up for the loss through cross-sales. He presented a survey that showed that 50% of the customers would switch banks if a checking fee were imposed. Explain how you could verify the presidents argument by using ABC.
Finch Company began its operations on March 31 of the current year. Finch has the following projected costs: April May June Manufacturing costs (1) $157,000 $198,000 $204,000 Insurance expense (2) 1,040 1,040 1,040 Depreciation expense 2,130 2,130 2,130 Property tax expense (3) 450 450 450 (1) Of the manufacturing costs, three-fourths are paid for in the month they are incurred; one-fourth is paid in the following month.(2) Insurance expense is $1,040 a month; however, the insurance is paid four times yearly in the first month of the quarter, (i.e., January, April, July, and October).(3) Property tax is paid once a year in November.The cash payments for Finch Company expected in the month of June are a.$49,500 b.$252,000 c.$153,000 d.$202,500