Nathan Davidson, financial analyst at LMN Corporation, is examining the behavior of quarterly utility costs for budgeting purposes. Davidson collects the following dataon machine-hours worked and utility costs for the past 8 quarters:(Click the icon to view the data.)Read the requirements.Requirement 1. Estimate the cost function for the quarterly data using the high-low method. (Complete all answer boxes.)Data table+QuarterMachine-HoursUtility CostsQuarter 1100,000 $265,000Quarter 255,000200,000Quarter 390,000250,000Quarter 4105,000280,000Quarter 570,000220,000Quarter 695,000260,000Quarter 785,000275,000Quarter 880,000245,000PrintDone-☑Requirements1. Estimate the cost function for the quarterly data using the high-low method.2. Plot and comment on the estimated cost function.3. Davidson anticipates that LMN will operate machines for 105,000 hours inquarter 9. Calculate the predicted utility costs in quarter 9 using the costfunction estimated in requirement 1.PrintDone✓

The high-low method, as the name indicates, uses two extreme data points to determine the values of…

Answered: Nathan Davidson, financial analyst at…

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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Assets Cash Accounts Receivable Merchandise Inventory Total Current Assets Land Equipment Accumulated Depreciation Total Assets Liabilities Current Liabilities Accounts Payable Taxes Payable Total Current Liabilities Bonds Payable Total Liabilities Zooyo Appliance Balance Sheet As at December 31 Shareholders' Equity Common Shares Retained Earnings Total Shareholders' Equity Total Liabilities and Shareholders' Equity Sales Cost of Goods Sold Gross Profit Operating Expenses Depreciation Expense Other Operating Expenses 2020 Total Operating Expenses Income from Operations Other Income and Expenses $37,580 17,000 21.000 75,580 Interest Expense Loss on Sale of Equipment Income before Income Tax Expense Income Tax Expense Net Income (Loss) Zooyo Appliance Income Statement For the Year Ended December 31, 2020 $29,000 18.000 47,000 80,000 127,000 2019 110,000 130,000 (26.500) (30.000) $289.080 $268.000 Notes There was no sale of land or purchase of equipment during the year. The company did…
The prôductión manager of Rordan Corporation has submitted the following quarterly production forecast for the upcoming fiscal year: 1st Quarter 8,600 2nd Quarter 6,500 3rd Quarter 7,300 4th Quarter 8, 200 Units to be produced Each unit requires 0.75 direct labor-hours, and direct laborers are paid $12.00 per hour. Required: 1. Prepare the company's direct labor budget for the upcoming fiscal year. (Round "Direct labor time per unit (hours)" answers to 2 decimal places.) Rordan Corporation Direct Labor Budget 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Year Direct labor time per unit (hours) Total direct labor-hours needed Direct labor cost per hour Total direct labor cost ... 田 0 DELL ...
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Wildhorse's Classic Cars restores classic automobiles to showroom status. Budgeted data for the current year are as follows: Restorers' wages and benefits Purchasing agent's salary and benefits Administrative salaries and benefits Other overhead costs Total budgeted costs (a1) Your answer is correct. Profit margin $ eTextbook and Media (a2) The company anticipated that the restorers would work a total of 10,000 hours this year. Expected parts and materials were $1,200,000. In late January, the company experienced a fire in its facilities that destroyed most of the accounting records. The accountant remembers that the hourly labor rate was $60.00 and that the material loading charge was 83.80%. Your answer is correct. Time Charges Material Loading Charges Profit margin (a3) $329,400 Determine the profit margin per hour on labor. (Round answer to 2 decimal places, e.g. 15.25.) eTextbook and Media 73,200 24,400 $427,000 Total price of labor and materials $ Determine the profit margin on…
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[The following Information applies to the questions displayed below.] Alden Company's monthly data for the past year follow. Management wants to use these data to predict future variable and fixed costs. 2234 in Month 1 Units Sold 315,000 Total Cost $ 152,500 160,000 96,250 260,000 200,600 200,000 95,000 5 285,000 196,500 6 185,000 107,000 7 365,000 314,800 8 265,000 146,750 9 77,000 70,000 10 145,000 125,625 11 89,000 89,000 12 95,000 86,650 2. Predict future total costs when sales volume is (a) 370,000 units and (b) 410,000 units. 370,000 units 410,000 units Total cost
Cullumber Industries produces and sells a cell phone-operated home security control systems. Information regarding the costs and sales during May 2022 is as follows. Unit selling price Unit variable costs Total monthly fixed costs Units sold Prepare a CVP income statement for Cullumber Industries for the month of May. (Round per unit answers to 2 decimal places, e.g. 15.25.) Cullumber Industries CVP Income Statement For the Month Ended May 31, 2022 Sales Variable Costs Contribution Margin Fixed Costs $55.00 $31.35 $128,000 7,800 Net Income/(Loss) S Total SA Per Unit 8400 Percent of Sales se
Texoma Trucking Company is exploring different prediction models that can be used to forecast indirect labor costs. One independent variable under consideration is machine hours. Following are matching observations on indirect labor costs and machine hours for the past six months: Machine hours Indirect labor costs $20,000 $24,000 $17,000 $22,000 $13,000 $14,000 Month 1 300 2 400 3 240 4 370 5 200 6 225 Using HIGH-LOW method, determine the following: 1. The total flexible cost formula? 2. The total indirect cost labor of Texoma Trucking Company if on the 10th month, they incurred 390 machine hours from operation.
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Question: Asy Clean operates a chain of dry cleaners. It is experimenting with a continuous-improvement (i.e., kaizen) budget for operating expenses. Currently, a typical location has operating expenses of $14,000 per month. Plans are in place to achieve labor and utility savings. The associated operational changes are estimated to reduce monthly operating costs by a factor of 0.99 beginning in January. What is the estimated operating cost for: i) January? ii) For June? iii) For December?
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