Maintenance Machine Health Number of Shipping Costs Units Month Costs Hours Insurance Employees Shipped January February $4,500 $4,452 $8,600 $8,600 $25,776 $29,664 165 68 7,160 8,240 120 75 March $4,600 $8,600 $8,600 $28,674 7,965 230 92 April May $4,850 318 105 $23,058 6,405 $5,166 $8,600 $21,294 460 89 5,915 June $4,760 $8,600 $8,600 $33,282 280 87 9,245 July August September $4,910 340 $31,428 8,730 93 $4,960 360 $8,600 $30,294 88 8,415 $5,070 420 $8,600 $25,110 95 6,975 October $5,250 $8,600 $25,866 495 102 7,185 $20,124 November $5,271 $8,600 510 97 5,590 December $4,760 $8,600 $34,596 275 94 9,610 Required 1. Which of the preceding costs is variable? Fixed? Mixed? Explain. 2. Using the high-low method, determine the cost function for each cost. 3. Combine the preceding information to get a monthly operating cost function for the Stein Corporation. 4. Next month, Stein expects to use 400 machine hours, have 80 employees, and ship 9,000 units. Estimate the total operating cost for the month.

Maintenance Machine Health Number of Shipping Costs Units Month Costs Hours Insurance Employees Shipped January February $4,500 $4,452 $8,600 $8,600 $25,776 $29,664 165 68 7,160 8,240 120 75 March $4,600 $8,600 $8,600 $28,674 7,965 230 92 April May $4,850 318 105 $23,058 6,405 $5,166 $8,600 $21,294 460 89 5,915 June $4,760 $8,600 $8,600 $33,282 280 87 9,245 July August September $4,910 340 $31,428 8,730 93 $4,960 360 $8,600 $30,294 88 8,415 $5,070 420 $8,600 $25,110 95 6,975 October $5,250 $8,600 $25,866 495 102 7,185 $20,124 November $5,271 $8,600 510 97 5,590 December $4,760 $8,600 $34,596 275 94 9,610 Required 1. Which of the preceding costs is variable? Fixed? Mixed? Explain. 2. Using the high-low method, determine the cost function for each cost. 3. Combine the preceding information to get a monthly operating cost function for the Stein Corporation. 4. Next month, Stein expects to use 400 machine hours, have 80 employees, and ship 9,000 units. Estimate the total operating cost for the month.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: Why is it relevant to calculate the fixed cost budget? Management must account for these fixed…

A: A fixed cost budget is a financial plan that estimates the total amount of fixed costs that a…

Q: The following data relates to a company's operating budget for its next operating year: Sales price…

A: Cost of goods sold is the total of material, labour and overhead costs associated with the…

Q: Bing producing toys has given the following details for the year 2019 with actual hours worked by…

A: Efficiency ratio=[Output which was actual in terms of standard hours / Actual number of hours worked…

Q: The following data relates to a company's operating budget for its next operating year: Sales price…

A: Cost Accounting: It is the process of collecting, recording, analyzing the cost, summarizing cost,…

Q: INFORMATION Samcor Limited manufactures tables. The following information was extracted from the…

A: Break-even point The point at which the total cost and the total revenue of a particular venture are…

Q: Adger omers ser company that company provided the following fixed and variable cost estimates that…

A: Flexible budget is to be prepared for the actual activity. The fixed element under the flexible…

Q: Kobe, Inc. had the following information relating to 2020. Budgeted factory overhead ₱ 74,800…

A: Predetermined overhead rate = Budgeted factory overhead / Estimated labor hours Applied factory…

Q: Use the information given below to calculate each of the following independently 3.2 Margin of…

A: Breakeven point is that point at which total fixed costs and total variable costs will be recovered…

Q: Princeton offers a large range of undergraduate courses. The University is interested in determining…

A: The high-low method is used to differentiate the mixed cost. Mixed cost is the combination of fixed…

Q: How much is the expected maintenance costs for November 2020, if the expected machine hours is…

A: In cost accounting, the high low method is a type of technique that is used to segregate mixed costs…

Q: Question 2:Different type of Budget name are specify in front of each description, You are required…

A: “Since you have posted a question with multiple sub-parts, we will solve first three subparts for…

Q: Light Up Corporation manufactures and sells two types of decorative lamps, Knox and Ayer. The…

A: Income statement:It is a financial statement that calculates the net income generated by the company…

Q: For Roche Inc., variable manufacturing overhead costs are expected to be $20.510 in the first…

A: Lets understand the budget.Management prepare budget in order to estimate future profit and loss…

Q: [The following information applies to the questions displayed below.] Adger Corporation is a service…

A: Solution.. Standard revenue per unit = $5,800 Actual Production = 40 Customers Planning…

Q: Required: Prepare a budgeted income statement for year 2. (Round your per unit average cost…

A: Budgeted report is prepared on the basis of past reports to achieve the goal of future years. If…

Q: PLEASE ANSWER ALL TRUE OR FALSE 8. The best way to establish budget figures is to use last year's…

A: Note: Since you have asked multiple questions, we will solve the first question for you. If you want…

Q: Bramble Corp. prepared a 2022 budget for 228000 units of product. Actual production in 2022 was…

A: Budget was prepared based on a planned production of 228000 units. Actual production is 160000…

Q: Renton company is reviewing the results of its production during the most recent fiscal year. Due to…

Q: The Adger Corporatio rvice company that mea res its output based on the number of cust mers ser…

A: Activity variance is the difference between the flexible budget and the planned budget. If the…

Q: Function: IF; Formula: Multiply, Subtract; Cell Referencing Using Excel to Prepare a Static and…

A: Static budget will not change with change in activity level. Flexible budget changes with change in…

Q: Required information [The following information applies to the questions displayed below.) Adger…

A: Flexible budget :— It is calculated by multiplying standard amount per unit with actual units.…

Q: The Budget director of Sunhelmet Corp., with your assistance, has gathered the following data for…

A: Answer to Question:- Direct…

Q: Using the high-low method, determine the cost function for each cost.

Q: Using the high-low method, determine the cost function for each cost?

A: High low method of cost estimation says that costs at highest level and lowest level are to be taken…

Q: Prepare the budgeted mul le-step income statement for the year. (Note: income taxes are not…

A: Given in the question: Sales Budget Anticipated Volume in units are as follows Product JB 50 =…

Q: 5) Budgeted costs are: A) the costs incurred this year C) predicted or forecasted costs B)…

A: The cost which is incurred this year is called current cost. The cost which is incurred last year is…

Q: The Caribbean Industrial Producers manufactures two products, “Zinc” and” “Ply”. The following sales…

A: Material BZN980 Direct Materials Usage Budget For the period from January 2016 to April 2016…

Q: Adger Corporation is a service company that measures its output based on the number of customers…

A: Flexible budget = Actual output*Variable element per customer served

Q: In 2020 the budget for a machine shop showed overheads of $60,000 and volume of activity of 12,000…

A: Overheads are the all type of indirect costs and expenses being incurred. These costs can not be…

Q: As a newly hired management accountant, you have been asked to prepare a profit plan for the company…

A: The Break-even point is the optimum point of no profit no loss as at this point the firm is earning…

Q: An assisted living has actual total revenues of 1.68 million, expenses of 1 million in 2018. The…

A: Budgets are useful measure of control. They are used in performance evaluation. How budgeted amount…

Q: a) Prepare a cash budget for the 3 months period February to April. b) Discuss the cash budget in…

A: A cash budget is a measure of the inflow and outflow of a business over a period of time. This could…

Q: Prepare a budgeted income statement using the information shown. Sales (units) Sales price per unit…

A: A budgeted income statement is a document that helps to estimate and evaluate a business revenue and…

Q: 2:Company B also uses the Analysis of Receivables method. However, Management has asked us to take a…

Q: As a newly hired management accountant, you have been asked to prepare a profit plan for the company…

A: Break even point is the optimum point of No profit no loss as at this point the firm is earning a…

Q: Prepare flexible budget reports for manufacturing overhead costs, and comment on findings. E13.20…

A: To prepare flexible budget reports for manufacturing overhead costs, we'll start by calculating the…

Q: Budgeted costs for the year 2019 Fixed cost Variable cost Costs of: (per year) $ (per case)…

A: Budgeting is a process of estimating the possible outcomes in advance which includes the sources of…

Concept explainers

Master Budget

A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.

Sales Budget and Selling

A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.

Question

Account analysis, high-low. Stein Corporation wants to find an equation to estimate some of their monthly operating costs for the operating budget for 2018. The following cost and other data were gathered for 2017:

Maintenance
Machine
Health
Number of
Shipping
Costs
Units
Month
Costs
Hours
Insurance
Employees
Shipped
January
February
$4,500
$4,452
$8,600
$8,600
$25,776
$29,664
165
68
7,160
8,240
120
75
March
$4,600
$8,600
$8,600
$28,674
7,965
230
92
April
May
$4,850
318
105
$23,058
6,405
$5,166
$8,600
$21,294
460
89
5,915
June
$4,760
$8,600
$8,600
$33,282
280
87
9,245
July
August
September
$4,910
340
$31,428
8,730
93
$4,960
360
$8,600
$30,294
88
8,415
$5,070
420
$8,600
$25,110
95
6,975
October
$5,250
$8,600
$25,866
495
102
7,185
$20,124
November
$5,271
$8,600
510
97
5,590
December
$4,760
$8,600
$34,596
275
94
9,610
Required
1. Which of the preceding costs is variable? Fixed? Mixed? Explain.
2. Using the high-low method, determine the cost function for each cost.
3. Combine the preceding information to get a monthly operating cost function for the Stein Corporation.
4. Next month, Stein expects to use 400 machine hours, have 80 employees, and ship 9,000 units. Estimate
the total operating cost for the month.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

Step 2

Step 3

Step 4

Step 5

Step 6

Step 7

Step 8

Trending now

This is a popular solution!

Step by step

Solved in 8 steps with 8 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Assume Marcella and the board adopted the spreadsheet prepared to forecast operations at 890,000 units (see the spreadsheet provided with this case) as the budget for 2016. At the close of the first six months of 2016, Marcella and the board asked the accountant to prepare an income statement for the first six months of 2016 to show how well the actual data compare to the budgeted data. The board asked to see a concise presentation showing only totals for variable and fixed costs. The analysis presented in Exhibit 2 below was provided for the board. Hanson expects sales and fixed costs to occur uniformly throughout the year. Exhibit 2: Budget Analysis as of June 30, 2016 Budget Actual Variance Sales units 445,000 470,000 Sales $ 1,824,500 $ 1,880,000 $55,500 Variable costs $694,200 $ 742,600 ($48,400)…
! Required information [The following information applies to the questions displayed below.] Adger Corporation is a service company that measures its output based on the number of customers served. The company provided the following fixed and variable cost estimates that it uses for budgeting purposes and the actual results for May as shown below: Revenue Employee salaries and wages Travel expenses Other expenses Fixed Element per Month $ 57,000 $ 36,000 Variable Element per Customer Served $ 5,800 $ 1,800 $ 950 Amount of revenue included in the planning budget 10. What amount of revenue would be included in Adger's planning budget for May? Actual Total for May $ 217,000 $ 128,100 When preparing its planning budget the company estimated that it would serve 35 customers per month; however, during May the company actually served 40 customers. $ 35,300 $ 34,400
The following information applies to the questions displayed below.] Adger Corporation is a service company that measures its output based on the number of customers served. The company provided the following fixed and variable cost estimates that it uses for budgeting purposes and the actual results for May as shown below: Fixed Elementper Month Variable Element per Customer Served Actual Totalfor May Revenue $ 5,400 $ 226,000 Employee salaries and wages $ 61,000 $ 2,200 $ 158,700 Travel expenses $ 530 $ 20,700 Other expenses $ 40,000 $ 38,000 When preparing its planning budget the company estimated that it would serve 40 customers per month; however, during May the company actually served 45 customers. 13. What amount of other expenses would be included in Adger’s planning budget for May? - What activity variance would Adger report in May with respect to its revenue? (Indicate the effect of each variance by selecting "F" for favorable, "U"…
You are required to prepare operational budget for the upcoming year including following: 1) Sales budget; 2) Production budget and Readymade production budget; 3) Direct materials budget; 4) Direct labor budget; 5) Purchase’s budget; 6) Overheads budget; 7) General production costs distribution; 8) Cost of sales budget; 9) Selling expenses budget; 10) Ending materials and ending Readymade production; 11) Profit and loss(Income statement).
Required: a) Using Activity Based Costing, calculate the rate for each cost driver. b) Using activity based budgeting, prepare a budgeted yearly operating statement for Aero3D Ltd. Show the following separately, within the statement. i. The budgeted output for each product per year; ii. The contribution to profits for each product and in total before charging activity based costs; iii. The profit for each product and in total after charging activity based costs but before charging core costs (non-activity based costs); iv. The total profit after charging core based costs.
Please do not give solution in image format thanku
Prepare a complete projected income statement in the contribution format for each scenario, in the manner of a flexible budget. Please show work Carolina Manufacturing Company has been operating at a loss for several years. A management team has assembled to determine what course of action to take next year to reach profitability. They begin by reviewing the most recent income statement (below). Carolina Manufacturing Company Income Statement For the Year Ended December 31 Sales (45,000 units at $15) Less cost of goods sold: Net loss Direct materials Direct labor Manufacturing overhea Gross margin Less operating expenses Selling expenses Variable Sales commissions Shipping 135,000 117,450 147,750 Fixed (advertising, salaries) Administrative expenses Variable (billing and other) Fixed (salaries and other) 40,500 8,100 180,000 $675,000 400,200 274,800 228,600 2,700 72,000 74,700 ($28,500)
The Current Designs staff has prepared the annual manufacturing budget for the rotomolded line based on an estimated annual production of 3,960 kayaks during 2020. Each kayak will require 56 pounds of polyethylene powder and a finishing kit (rope, seat, hardware, etc.). The polyethylene powder used in these kayaks costs $1.00 per pound, and the finishing kits cost $150 each. Each kayak will use two kinds of labor-2 hours of type I labor from people who run the oven and trim the plastic, and 3 hours of work from type II workers who attach the hatches and seat and other hardware. The type I employees are paid $19 per hour, and the type II are paid $16 per hour. Manufacturing overhead is budgeted at $381,520 for 2020, broken down as follows. Variable costs Indirect materials Manufacturing supplies Maintenance and utilities Fixed costs Supervision Insurance Depreciation Total Polyethylene powder Finishing kits Type I labor Type II labor Indirect materials Manufacturing supplies Maintenance…
I’m confused on this problem
Statler Corporation wants to find an equation to estimate some of their monthly operating costs for the operating budget for 2021. The following cost and other data were gathered for 2020: (Click the icon to view the cost and other data) Read the requirements. Requirement 1. Which of the preceding costs is variable? Fixed? Mixed? Explain. Cost function Mixed Fixed Variable Cost Maintenance Health insurance Shipping costs Requirement 2. Using the high-low method, determine the cost function for each cost. Begin by selecting the general formula that represents the linear cost function for each cost. y = a +bX y = a y = bX Maintenance Health insurance Shipping costs Now determine the cost function for each cost. (Enter all values in the same format as the general linear formula. If an input field is not used in the Cost function Maintenance Explanation The cost neither remains constant in total nor remains constant per unit. Although the cost driver varies from month to month, the total…
Please help me
Hi, please help :) Use the appropriate mixed cell references and relative references to reflect the percentages in range A22:B27 to determine the projected expenses for each of the Budgeted Selling and Budgeted Administrative Expenses for the year of 2022.