Problem 5-68 (Static) Part aRequireda. Use the high-low method to estimate the fixed and variable portions of store costs based on employees. (Do not round yourintermediate calculation. Negative amounts should be indicated by a minus sign. Round your answer to the nearest whole number(in thousands of dollars).)Variable cost (per employee)Fixed cost Required informationProblem 5-68 (Static) Cost Estimation: Simple and Multiple Regression Using a Spreadsheet (AppendixA) (LO 5-4, 5, 6, 9)[The following information applies to the questions displayed below.]Davis Stores sells clothing in 15 stores located around the southwestern United States. The managers at Davis areconsidering expanding by opening new stores and are interested in estimating costs in potential new locations. Theybelieve that costs are driven in large part by store volume measured by revenue. During a discussion, one of themanagers suggests that number of employees might be better at explaining cost than store revenues. As a result of thatsuggestion, managers collected the following information from last year's operations (revenues and costs in thousands ofdollars):Costs Employees101$ 4,2141022,8941035, 1811043,9981053,676106107108109110 2,9591114,179112113Store1141153, 3195, 0292,3744, 6883, 2002,5564, 6552,98639$2947383338542644353741354228Revenues4, 1002,2275,7383,9822,9144,0236,8941,7795,4163,2283,8864, 6903,5524,8172,124

Cost is the Added of money related to materials, or labor needed to purchase or make anything in the…

Problem 5-68 (Static) Part a Required a. Use the high-low method to estimate the fixed and variable portions of store costs based on employees. (Do not round your intermediate calculation. Negative amounts should be indicated by a minus sign. Round your answer to the nearest whole number (in thousands of dollars).) Variable cost (per employee) Fixed cost

Problem 5-68 (Static) Part a Required a. Use the high-low method to estimate the fixed and variable portions of store costs based on employees. (Do not round your intermediate calculation. Negative amounts should be indicated by a minus sign. Round your answer to the nearest whole number (in thousands of dollars).) Variable cost (per employee) Fixed cost

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: [The following information applies to the questions displayed below] Cool Sky reports the following…

A: Lets understand the basics.Costing income statement can be prepared using either,(1) Variable…

Q: Scatter Diagrams and High-Low Cost Estimation Assume the local Pearle Vision has the following…

A: The high-low approach is a cost accounting strategy that divides a mixed cost into its variable and…

Q: Given the following cost and activity observations for Bounty Company's utilities, use the high-low…

A: High Low Method of Variable Utility Cost -The High-low method is a method used to separate costs.…

Q: Happy Trails has the following information for its manufacturing: Direct Materials $16 Direct Labor…

A: The income statement is prepared to find net income or losses incurred during the period.

Q: Required information [The following information applies to the questions displayed below.] Cool Sky…

A: Income statement is the financial statement that records all the income and expenses of the business…

Q: or each cost, identify it as: Variable or Fixed - A. B.…

Q: DasToe Inc. (TI) is a manufacturer of heating elements for toaster ovens. To improve control over…

A: Variable Cost :— It is the cost that changes with change in activity of cost driver. Variable cost…

Q: Absorption Costing Income Statement On October 31, the end of the first month of operations,…

A: Absorption costing is a method of costing in which product cost is calculated by adding direct…

Q: JART manufactures and sells underwater markers. Its contribution margin income statement follows.…

A: Lets understand the basics.The businesses may receive special orders over and above their normal…

Q: help please answer in text form with proper workings and explanation for each and every part and…

A: Option a: This option is incorrect because variable cost per unit typically remains constant within…

Q: Assigning overhead costs using ABC will usually O a. None of the given answers. O b. Provide less…

A: Activity-based costing (ABC) can be defined as a method of assigning manufacturing overhead cost to…

Q: Baxtell Company manufactures and sells a single product. The following costs were incurred during…

A: The income statement tells about the profitability of the business for the current period. The net…

Q: Rey Company's only product sells for $230 per unit. Data for its first year of operations follow. $…

A: In case of absorption costing we consider the normal manufacturing costs as product costs and hence…

Q: 7. Calculate the total amount of product cost distortion for entire product line caused by…

A: ABC costing, also known as Activity-Based Costing, is a method of cost accounting that allocates…

Q: Answer the question Question 4 Company C makes and sells three types of products for which the…

A: When some input is in limited capacity , then we need to find out contribution per input. For…

Q: CVP Analysis of Multiple Products Alo Company produces commercial printers. One is the regular…

A: The break-even point is the number of units sold at which we are able to cover our variable and…

Q: Required Information [The following information applies to the questions displayed below.] Chuck…

A: VARIABLE COSTINGVariable Costing is a Cost Managerial Accounting Method in Which all Variable Cost…

Q: Assume that a company makes three products Product A, Product B, and Product C-and provides the…

A: Where some resources are in scarce capacity, the same is used in that product which provides the…

Q: Gallatin County Motors Inc. assembles and sells snowmobile engines. The company began operations on…

A: Variable costs are those which may change with the change in the level of goods produced by an…

Q: In Cullumber Company, data concerning two products are unit contribution margin-Product A $30,…

A: Contribution margin per unit of limited resources:— It is calculated by dividing contribution margin…

Q: For the year ending December 31, 2022, Bonita Company accumulates the following data for the…

A: Responsibility report:Responsibility reports are those reports which provides reports to different…

Q: Exercise 2-37 (Static) Basic Concepts (LO 2-1, 2, 6) Lillbridge & Friends, Incorporated provides you…

A: Cost accounting is a type of managerial accounting that evaluates both fixed expenses and the…

Q: Service Emphasis The following analysis of selected data is for each of the two services Gates…

A: Variable costs are costs that varies with the change in the level of output. Fixed costs are costs…

Q: Problem 12-24 (Algo) Prepare a contribution margin format income statement; calculate breakeven…

A: Break even point :— It is the point of production where total cost is equal to total revenue. At…

Q: 1) High-Low Method to find the equation for a mixed cost XYZ Manufacturing wants to understand its…

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

Q: Variable Costing Income Statement; Reconciliation (L02, 1031 During Durton Company's first two years…

A: Lets understand the basics.There are two methods through which income statement is generally…

Concept explainers

Inventory Accounting

Inventory accounting is that branch of accounting that helps in determining the specific value of assets at different stages of production and development.

Question

Problem 5-68 (Static) Part a
Required
a. Use the high-low method to estimate the fixed and variable portions of store costs based on employees. (Do not round your
intermediate calculation. Negative amounts should be indicated by a minus sign. Round your answer to the nearest whole number
(in thousands of dollars).)
Variable cost (per employee)
Fixed cost

Required information
Problem 5-68 (Static) Cost Estimation: Simple and Multiple Regression Using a Spreadsheet (Appendix
A) (LO 5-4, 5, 6, 9)
[The following information applies to the questions displayed below.]
Davis Stores sells clothing in 15 stores located around the southwestern United States. The managers at Davis are
considering expanding by opening new stores and are interested in estimating costs in potential new locations. They
believe that costs are driven in large part by store volume measured by revenue. During a discussion, one of the
managers suggests that number of employees might be better at explaining cost than store revenues. As a result of that
suggestion, managers collected the following information from last year's operations (revenues and costs in thousands of
dollars):
Costs Employees
101$ 4,214
102
2,894
103
5, 181
104
3,998
105
3,676
106
107
108
109
110 2,959
111
4,179
112
113
Store
114
115
3, 319
5, 029
2,374
4, 688
3, 200
2,556
4, 655
2,986
39$
29
47
38
33
38
54
26
44
35
37
41
35
42
28
Revenues
4, 100
2,227
5,738
3,982
2,914
4,023
6,894
1,779
5,416
3,228
3,886
4, 690
3,552
4,817
2,124

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: Define cost

VIEW

Step 2: The calculation of variable cost and fixed cost is as follows-

VIEW

Solution

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps with 2 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

Please do not give solution in image format thanku
Please do not give solution in image format thanku
A-5
am. 106.
Part 2: Based on the data presented in the Unit VII Spreadsheet Template in Excel (Full Variable tab), complete thecalculations listed below.• Calculate the value of ending inventory under full or absorption costing.• Calculate the value of ending inventory under variable costing.Which method you think is more helpful to managers and why. Cookie Business Productions Costs: Direct material $ 0.60 Direct labor $ 1.00 Variable manufacturing overhead $ 0.40 Total variable manufacturing costs per unit $ 2.00 Fixed manufacturing overhead per year $ 139,000.00 In addition, the company has fixed selling and administrative costs: Fixed selling costs per year $ 50,000.00 Fixed administrative costs per year $ 65,000.00 Selling price per cookie $ 3.75 Number of cookies produced 2,780,000 Number of cookies sold 2,600,000 Full (absorption) costing : Full…
Question 5 Using the following table a) construct the cost schedule for a firm operating in the short run Marginal Average Average Average Fixed Quantity- Total Total Total Production Fixed Variable Cost Cost Variable Total cost cost Cost Cost Cost $180 $180 --- --- ---- ---- 1 $200 2 $215 3 $225 4 $230 5 $240 $260 7 $295 8 $345 9 $405 b) Graph the average variable cost, average total cost and marginal cost curves.
Companion Computer Company has been purchasing carrying cases for its portable computers at a purchase price of $57 per unit. The company, which is currently operating below full capacity, charges factory overhead to production at the rate of 46% of direct labor cost. The fully absorbed unit costs to produce comparable carrying cases are expected to be as follows: Direct materials $28 Direct labor 16 Factory overhead (46% of direct labor) 7.36 Total cost per unit $51.36 If Companion Computer Company manufactures the carrying cases, fixed factory overhead costs will not increase and variable factory overhead costs associated with the cases are expected to be 14% of the direct labor costs.
Show your work.
A7
Only typing answer Please explain step by step without table and graph thankyou