Month Pizza Production Costs (RM) Number of Pizzas Produced 1 30,800 13,300 42,100 15,400 3 33,400 12,600 4 33,000 -12,500 5 36,600 14,800 31,200 9,800 7 30,400 9,800 8 34,100 10,200 9. 41,300 14,700 10 27,560 8,400 All computations are to be rounded up to its nearest 2 decimal points. Required: a. Use the high-low method to estimate the fixed and variable portions of overhead costs based on number of pizzas produced. b. What is the estimated total variable cost for a month in which 5,000 pizzas are produced? c. CPSB has heard that the high-low method has a major limitation compared to simple regression. What is it?

Month Pizza Production Costs (RM) Number of Pizzas Produced 1 30,800 13,300 42,100 15,400 3 33,400 12,600 4 33,000 -12,500 5 36,600 14,800 31,200 9,800 7 30,400 9,800 8 34,100 10,200 9. 41,300 14,700 10 27,560 8,400 All computations are to be rounded up to its nearest 2 decimal points. Required: a. Use the high-low method to estimate the fixed and variable portions of overhead costs based on number of pizzas produced. b. What is the estimated total variable cost for a month in which 5,000 pizzas are produced? c. CPSB has heard that the high-low method has a major limitation compared to simple regression. What is it?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Fill in the missing amounts in each of the eight case situations below. Each case Is Independent of the others. (Hint: One way to find the missing amounts would be to prepare a contribution format Income statement for each case, enter the known data, and then compute the missing items.) Required: a. Assume that only one product is being sold in each of the following four case situations: Unit sold Sales Variable expenses Fixed expenses Operating income (loss) Contribution margin per unit Sales Variable expenses Fixed expenses $ Operating income (loss) Average contribution margin (percentage) Case #1 20,400 244,800 163,200 68,000 $ $ 136,000 $ 10 Case #2 $ Case #1 536,000 43,520 10.880 $ 8,800 20% 10 $ 69 Case #3 Case #2 13,600 b. Assume that more than one product is being sold in each of the following four case situations: (Enter "Contribution margin ratio" in percent. Round your final answers to the nearest whole dollar amount.) 436.000 283.400 109.000 95,200 16,320 13 $ S CA Case #4…
Your company management wants you to compare the list of materials for HML and ABC analysis. For ABC classification they set the following criteria; Items below SR 100000 annual consumption shall be considered as C-items, items between SR 100000 and SR 150000 shall be considered as B-items, and items above SR 150000 shall be considered as A- items For HML classification they set the following criteria; Items below unit price SR 50 shall be considered as L-items, items between SR 50 and SR 100 unit price shall be considered as M-items, and items above SR 100 unit price shall be considered as H-items. Based upon your analysis suggest which classification shall be better for the company so that inventory can be optimized. Justify your answer. Item Consumption (Units) Annual Price/unit SR H/M/L Consumption (SR) Annual A/B/C A 2000 40 B 3000 65 C 2500 90…
Selected data concerning the past year’s operations of the Altek Manufacturing Company areas follows: Inventories ($) Beginning EndingRaw materials 71,000 81,000Work in Process 80,000 30,000Finished Goods 90,000 110,000 Other Data:Direct Materials Used ---------------------------------------------- $ 326,000Total Manufacturing Costs Charged to productionduring the year (includes direct material, direct labor,and manufacturing overhead applied at arate of 60% of direct labor cost) ----------------------------------$ 686,000Cost of Goods Available for Sale ----------------------------------$ 826,000Selling and Administration Expenses ----------------------------- $ 31,500 a) What was the cost of raw materials purchased during the year? b) What was the direct-labor cost charged to production during the year? c) What was the…
When preparing cost estimates for account analysis purposes, should the costs be extracted from the historical accounting records?
The Dorilane Company produces a set of wood patio furniture consisting of a table and four chairs. The company has enough customer demand to justify producing its full capacity of 3,800 sets per year. Annual cost data at full capacity follow: Direct labor Advertising Factory supervision Property taxes, factory building Sales commissions Insurance, factory Depreciation, administrative office equipment Lease cost, factory equipment Indirect materials, factory Depreciation, factory building Administrative office supplies (billing) Administrative office salaries Direct materials used (wood, bolts, etc.) Utilities, factory $ 89,000 $ 103,000 $70,000 $ 23,000 $ 65,000 $ 6,000 $ 2,000 $ 17,000 $ 18,000 $ 106,000 $ 5,000 $ 111,000 $ 426,000 $ 46,000 Required: 1. Enter the dollar amount of each cost item under the appropriate headings. Note that each cost item is classified in two ways: first, as variable or fixed with respect to the number of units produced and sold; and second, as a selling…
I need help with this accounting problem
An analyst is constructing a simple model to determine the gross and net profit of a product, given its profit per unit, quantity sold, and the total costs assigned to the product. The calculation for gross profit is Profit per Unit times Quantity. The calculation for Net Profit is Gross Profit minus Total Costs. A B 1. 2 Profit per Unit 8 3 Quantity |10,100 4 Gross Profit 5 6 Total Costs 6,100 7 8 Net Profit With the values for Profit per Unit, Quantity, and Total Costs shown above, what should the model return for the following calculated cells? Cell Value Gross Profit Net Profit
Which of the following statements correctly complete the sentence:"Gross Margin equals":I. sales revenue less (minus) cost of goods sold.II. contribution margin less (minus) fixed costs.III. operating income plus all period costs.IV. sales revenue less (minus) cost of goods manufactured.
Please help with the attached question