Exercise 5A-1 (Algo) High-Low Method [LO5-10]The Cheyenne Hotel in Big Sky, Montana, recorded its total electrical costs and number of occupancy-days over the last year. Anoccupancy-day represents a room rented for one day. The hotel's business is highly seasonal, with peaks occurring during the skiseason and in the summer.MonthJanuaryFebruaryMarch.AprilMayJuneJulyAugustSeptemberOctoberNovemberDecemberOccupancy-Days3,4004,1503,0802,2301,5701,9103,8803,8302,0601,9401,0502,710ElectricalCosts$ 9,536$ 10, 180Variable cost of electricityFixed cost of electricity$9,184$ 7,136$ 5,024$ 6,112$ 9,997$ 9,904$ 6,592$ 6,208$ 3,360$ 8,168Required:1. Using the high-low method, estimate the fixed cost of electricity per month and the variable cost of electricity per occupancy-day.Note: Do not round your intermediate calculations. Round your Variable cost answer to 2 decimal places and Fixed costelement answer to nearest whole dollar amount.per occupancy-dayper month

In cost accounting, the high-low method is a method that helps segregate mixed expenses into their…

Answered: Exercise 5A-1 (Algo) High-Low Method…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

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Chapter1: Financial Statements And Business Decisions

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Exercise 5-4 (Algo) Break-Even Analysis [LO5-4] Mauro Products sells a woven basket for $14 per unit. Its variable expense is $10 per unit and the company's monthly fixed expense is $4,000. Required: 1. Calculate the company's break-even point in unit sales. 2. Calculate the company's break-even point in dollar sales. Note: Do not round intermediate calculations. 3. If the company's fixed expenses increase by $600, what would become the new break-even point in unit sales? In dollar sales? Note: Do not round intermediate calculations. 1. Break-even point in unit sales 2. Break-even point in dollar sales 3. Break-even point in unit sales 3. Break-even point in dollar sales baskets baskets
Chapter 20 Excel Online Problems eBook High-low method for a service company Show Me How Office 365 Sierra Railroad Inc. decided to use the high-low method and operating data from the past six months to estimate the fixed and variable components of transportation costs. The activity base used by Sierra Railroad is "gross-ton miles," which is the total number of tons multiplied by the miles moved. January February March April May June Transportation Costs Gross-Ton Miles $732,000 217,000 816,200 242,000 576,800 157,000 782,500 235,000 656,300 841,400 189,000 255,000 This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below. Open spreadsheet Determine the variable cost per gross-ton mile and the total fixed cost. Variable cost (If required, round to two decimal places.) $ Total fixed cost $ X per gross-ton mile
Question 3 Angie March owns a catering company that stages banquets and parties for both individuals and companies. The business is seasonal, with heavy demand during the summer months and year-end holidays and light demand at other times. Angie has gathered the following cost information from the past year: Month January February March April May June July August September October November December Total ▼(a) Labor Hours Overhead Costs 3,500 2,800 3,000 4,200 4,500 5,500 6,500 7,500 7,800 4,500 Variable cost = $ x 3,100 6,500 59,400 Your answer is partially correct. Try again. Using the high-low method, compute the overhead cost per labor hour and the fixed overhead cost per month. (Round variable cost to 2 decimal places, e.g. 52.75 and all other answers to 0 decimal places, e.g. 5,275.) Fixed cost = $ $73,000 69,080 70,000 77,000 80,000 87,000 91,000 96,000 99,580 81,000 73,000 90,000 $986,660 6.1 per labor hour
Question 5.2 Xplornet Ltd. is an internet service provider. The company had 14,000,000 subscribers in 2021, and employed 18 customer service representatives. During 2021 each customer service representative worked 7 1/2 hours per day for 236 days at a fixed annual salary of $42,000. The company received 110,000 telephone calls from its customers in 2021 that lasted fifteen minutes on average. Required Calculate the cost of unused customer service capacity in 2021 with the assumption that customer service costs are engineered costs.
Problem 2-19A (Algo) Context-sensitive nature of cost behavior classifications LO 2-1 Vernon Bank's start-up division establishes new branch banks. Each branch opens with three tellers. Total teller cost per branch is $96,000 per year. The three tellers combined can process up to 85,000 customer transactions per year. If a branch does not attain a volume of at least 55,000 transactions during its first year of operations, it is closed. If the demand for services exceeds 85,00O transactions, an additional teller is hired and the branch is transferred from the start-up division to regular operations. Required a. What is the relevant range of activity for new branch banks? b. Determine the amount of teller cost in total and the average teller cost per transaction for a branch that processes 55,000, 65,000, 75,000, or 85,000 transactions. In this case (the activity base is the number of transactions for a specific branch), is the teller cost a fixed or a variable cost? c. Determine the…
Problem 8-23 Comprehensive Problem [LO8-1, LO8-2, LO8-3, LO8-5, LO8-6] Lou Barlow, a divisional manager for Sage Company, has an opportunity to manufacture and sell one of two new products for a five-year period. His annual pay raises are determined by his division’s return on investment (ROI), which has exceeded 23% each of the last three years. He has computed the cost and revenue estimates for each product as follows: Product A Product B Initial investment: Cost of equipment (zero salvage value) $ 290,000 $ 500,000 Annual revenues and costs: Sales revenues $ 350,000 $ 450,000 Variable expenses $ 160,000 $ 210,000 Depreciation expense $ 58,000 $ 100,000 Fixed out-of-pocket operating costs $ 80,000 $ 60,000 The company’s discount rate is 16%. Click here to view Exhibit 8B-1 and Exhibit 8B-2, to determine the appropriate discount factor using tables. Required: 1. Calculate the payback period for each product.…
Problem 8-44 (Algo) Cost Estimation; High-Low Method [LO 8-3] Horizon BP in Antelope Park, Alaska, has noticed that utility bills are substantially higher when the average monthly temperature is colder. The only thing in the shop that uses natural gas is the furnace. Because of prevailing low temperatures, the furnace is used every month of the year (though less in the summer months and very little in August). Everything else in the shop runs on electricity, and electricity use is fairly constant throughout the year. For a year, Horizon has been recording the average daily temperature and the cost of its monthly utility bills for natural gas and electricity. Required: Use the high-low method to estimate utility cost for the upcoming months of January and February. The forecast for January is a near record average temperature of 5°F; temperatures in February are expected to average 40°F.
QUESTION 13 The Cheyenne Hotel In Big Sky. Montana, has accumulated records of the total electrical costs of the hotel and the number of occupancy-days over the last year. An occupancy-day represents a room rented for one day. The hotel's business is highly seasonal, with peaks occuning during the ski season and in the summer 000 Mush January February March Apri May Jure July August September October November December 3,180 2.920 3,780 2,160 650 2,050 4,050 4,070 1,780 570 $1.80 $1.20 1,580 2,680 $1.00 $0.56 None of the other answers is correct $ 6,510 $ 6.261 $ 7,392 $5.500 $ 1,820 Using the high-low method, the variable cost of electricity per occupancy-day is closest to: $5,261 $ 7,829 $ 7,806 $ 4,984 $ 1,596 $ 4,424 $5,908
t ces Exercise 6-5 (Algo) Compute the Margin of Safety [LO6-5] Molander Corporation is a distributor of a sun umbrella used at resort hotels. Data concerning the next month's budget appear below: Selling price per unit Variable expense per unit Fixed expense per month Unit sales per month Required: 1. What is the company's margin of safety? $ 24 $ 16 $ 7,200 1,050 Note: Do not round intermediate calculations. 2. What is the company's margin of safety as a percentage of its sales? Note: Round your percentage answer to 2 decimal places (i.e. .1234 should be entered as 12.34). 1. Margin of safety (in dollars) 2. Margin of safety percentage %
Problem 5-4&5 The Lucas Inn has room and food operations. The rooms operation provides 65 percent of the total revenue and has variable costs of 25 percent. The food operation provides 35 percent of the total revenue and has variable costs of 60 percent. The total annual fixed costs are $300,000. 4. What is the breakeven point? (use 2 decimal places for dollars and cents) 478087.65 5. Revenue required for $100,000 profit with 20% tax rate. (use 2 decimal places for dollars and cents) 677290.84
4
Problem 8-23 Comprehensive Problem [LO8-1, LO8-2, LO8-3, LO8-5, LO8-6] Lou Barlow, a divisional manager for Sage Company, has an opportunity to manufacture and sell one of two new products for a five-year period. His annual pay raises are determined by his division's return on investment (ROI), which has exceeded 20% each of the last three years. He has computed the cost and revenue estimates for each product as follows: Product A Product B Initial investment: Cost of equipment (zero salvage value) Annual revenues and costs: Sales revenues Variable expenses Depreciation expense Fixed out-of-pocket operating costs $250,000 $ 460,000 $300,000 $140,000 $ 50,000 $ 75,000 $ 400,000 $ 190,000 $ 92,000 2$ 55,000 The company's discount rate is 18%. Click here to view Exhibit 8B-1 and Exhibit 8B-2, to determine the appropriate discount factor using tables. Required: 1. Calculate the payback period for each product. (Round your answers to 2 decimal places.) Product A Product B Payback period…

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