Muffler Incorporated produces floor mats for cars and trucks. The owner, Kenneth Muffler, asked you to assist him in estimating his maintenance costs. Together, Mr. Muffler and you determined that the single best cost driver for maintenance costs was machine hours. Below are data from the previous fiscal year for maintenance expense and machine hours: Month 1 2 3 456789 10 11 12 Maintenance Expense $ 3,280 3,470 3,650 3,780 3,780 4,000 Multiple Choice O $1.44. Using the high-low method, unit variable cost is calculated to be: $1.61. $1.66. 3,770 3,580 3,300 2,960 2,860 3,040 $1.50. Machine Hours 2,280 2,380 2,480 2,510 2,360 2,530 2,500 2,470 2,290 2,160 1,770 2,150

Muffler Incorporated produces floor mats for cars and trucks. The owner, Kenneth Muffler, asked you to assist him in estimating his maintenance costs. Together, Mr. Muffler and you determined that the single best cost driver for maintenance costs was machine hours. Below are data from the previous fiscal year for maintenance expense and machine hours: Month 1 2 3 456789 10 11 12 Maintenance Expense $ 3,280 3,470 3,650 3,780 3,780 4,000 Multiple Choice O $1.44. Using the high-low method, unit variable cost is calculated to be: $1.61. $1.66. 3,770 3,580 3,300 2,960 2,860 3,040 $1.50. Machine Hours 2,280 2,380 2,480 2,510 2,360 2,530 2,500 2,470 2,290 2,160 1,770 2,150

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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Muffler Incorporated produces floor mats for cars and trucks. The owner, Kenneth Muffler, asked you to assist him in estimating his maintenance costs. Together, Mr. Muffler and you determined that the single best cost driver for maintenance costs was machine hours. Below are data from the previous fiscal year for maintenance expense and machine hours: Maintenance Expense Month Machine Hours 1 $ 3,360 2,320 234 2 3,550 2,420 3,730 2,520 3,860 2,550 5 3,860 2,400 6 4,160 2,560 7 3,850 2,540 8 3,660 2,510 9 3,380 2,330 10 3,000 2,200 11 2,900 1,710 12 3,120 2,190 Using the high-low method, total monthly fixed cost is calculated to be (Round final answer to full dollar amount with no decimal places): Multiple Choice
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Ch 6) Required information [The following information applies to the questions displayed below.] Listed here are the costs associated with the production of 1,000 drum sets manufactured by TrueBeat. Costs 1. Plastic for casing-$21,000 2. Wages of assembly workers-$85,000 3. Property taxes on factory-$6,000 4. Office accounting salaries-$32,000 5. Drum stands-$43,000 6. Rent cost of office for accountants-$36,000 7. Office management salaries-$160,000 8. Annual fee for factory maintenance-$16,000 9. Sales commissions-$18,000 10. Factory machinery depreciation, straight-line-$47,000 Costs Required: 1. Classify each cost and its amount as either product or period. The first cost is completed as an example. 1. Plastic for casing 2. Wages of assembly workers 3. Property taxes on factory 4. Office accounting salaries 5. Drum stands 6. Rent cost of office for accountants 7. Office management salaries 8. Annual fee for factory maintenance 9. Sales commissions 10. Factory machinery…
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Rex Industries has identified three different activities as cost drivers: machine setups, machine hours, and inspections. The overhead and estimated usage are: Compute the overhead rate for each activity. Round your answers to two decimal places. Overhead Overhead Annual Rate per Activity per Activity Usage Activity Machine Setups $157,850 4,100 $ Machine Hours 324,622 14,114 2$ Inspections 119,000 3,400
[The following information applies to the questions displayed below] Listed here are the costs associated with the production of 1,000 drum sets manufactured by TrueBeat. Costs 1. Plastic for casing-$21,000 2. Wages of assembly workers-$86,000 3. Property taxes on factory-$7,000 4. Office accounting salaries-$42,000 5. Drum stands-$27,000 6. Rent cost of office for accountants-$12,000 7. Office management salaries-$180,000 8. Annual fee for factory maintenance-$21,000 9. Sales commissions-$15,000 10. Factory machinery depreciation, straight-line-$40,000
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Classify each cost as either a product cost or a period cost. Indicate whether each product cost is a direct materials cost, a direct labor cost, or a factory Indicate whether each period cost is a selling expense or an administrative expense. Costs a. Annual bonus paid to the chief financial officer of the company b. Annual fee to a celebrity to promote the aircraft c. Cost of electronic guidance system installed in the airplane cockpit d. Cost of the flight data recorder (the black box) for the airplane e. Cost of normal scrap from production of the airplane body f. Cost of small replicas of the airplane used to promote and market the airplane g. Cost of paving the headquarters employee parking lot h. Decals for cockpit door, the cost of which is immaterial to the cost of the final product 1. Depreciation on factory equipment j. Hourly wages for janitorial staff for the factory k. Hydraulic pumps used in the airplane's flight control system 1. Instrument panel installed in the…
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Harbortown Marine Products (HMP) manufactures and sells various fixtures for boat cabins. One fixture uses a specialized fitting that is not used in any other HMP product. The management of HMP has considered outsourcing the fitting for several years but has never identified a suitable supplier. HMP has collected the following data on the cost of the fitting: Materials $ 6.45 Labor 4.85 Manufacturing overhead 14.45 Total $ 25.75 Rivard Fittings, a local auto supplier, contacts HMP and tells them that because of the loss of one of Rivard's customers, there is enough capacity to produce up to 5,000 units of the fitting monthly. Rivard has offered to sell HMP any quantity (up to 5,000 units monthly) at a price of $20.15 per fitting. If Rivard supplies all of the 3,020 fittings currently produced by HMP, HMP will avoid all of the variable overhead associated with the fitting and one-third of the fixed overhead. Management estimates that variable overhead for the fitting is…
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