The Cheyenne Hotel in Big Sky, Montana, has accumulated records of the total electrical costs of the hotel and thenumber of occupancy-days over the last year. An occupancy-day represents a room rented for one day. The hotel'sbusiness is highly seasonal, with peaks occurring during the ski season and in the summer.Month Occupancy-Days Electrical CostsJanuary 3,180$ 6,510February 2,920$ 6,261March 3,780$ 7,392April$ 5,569May$ 1,820June2,050$ 5,261July4,050$ 7,829August 4,070$ 7,896September 1,780$ 4,984October 570$ 1,596$4,424$5,908Using the high-low method, estimate the fixed cost of electricity per month and the variable cost of electricity peroccupancy-day.2,160650November 1,580December 2,680

Lets understand the basics.High low method separates fixed costs and variable costs from the total…

Answered: The Cheyenne Hotel in Big Sky, Montana,…

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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↑ Suppose River Valley Lodge incurs $70,000 of fixed costs each month Compute the (a) total fixed cost and (b) fixed cost per guest if the hotel has 14,000 guests next month. Compare the fixed cost per guest at the higher occupancy rate to the fixed cost per guest when only 1,500 guests stay during the month. (a) Compute the total fixed cost if the hotel has 14,000 guests next month. Total fixed costs to wide changes in volume, therefore, total fixed costs will (b) Compute the fixed cost per guest if the hotel has 14,000 guests next month. First, identify the formula to compute the fixed cost per guest, then compute the foxed cost per guest at (1) 14,000 guests and at (2) 1.500 guests (Round the fixed cost per quest to the nearest cent.) Fixed cost per quest Next
Show the solution in good accounting form
Without calculations, determine the contribution margin at the break-even point. Break-even point $
Windsor Co. incurs $881,250 of overhead costs each year in its three main departments, machining ($500,000), inspections ($250,000), and packing ($131,250). The machining department works 4,000 hours per year, there are 600 inspections per year, and the packing department packs 1,000 orders per year. Information about Windsor's two products is as follows: Product X Product Y Machining hours 1,000 3,000 Inspections 100 500 Orders packed 350 650 Direct labor hours 1,700 1,800 Using ABC, how much overhead is assigned to Product X this year? a. $305,048 b. $212,604 c. $428,036 d. $440,625
Joson Incorporated produces and sells two products. Data concerning those products for the most recent month appear below: Product A Product B Sales $ 30,000 $ 35,000 Variable expenses $ 11,800 $ 26,550 The fixed expenses of the entire company were $39,160. The break-even point for the entire company is closest to:
B-You is a consulting firm that works with managers to improve their interpersonal skills. Recently, a representative of a high-tech research firm approached B-You's owner with an offer to contract for one year with B-You to improve the interpersonal skills of a newly hired manager. B-You reported the following costs and revenues during the past year (before the proposed contract). B-YOU Annual Income Statement Sales revenue $ 560,000 Costs Labor 260,000 Equipment lease 42,000 Rent 35,000 Supplies 30,000 Officers' salaries 160,000 Other costs 20,000 Total costs $ 547,000 Operating profit (loss) $ 13,000 If B-You decides to take the contract to help the manager, it will hire a full-time consultant at $85,500. The equipment lease will increase by 20 percent. Supplies will increase by an estimated 10 percent and other costs by 15 percent. The existing building has space for the new consultant. No new offices will be necessary for this work.
Leslie Sporting Goods is a locally owned store that specializes in printing team jerseys. The majority of its business comes from orders for various local teams and organizations. While Leslie's prints everything from bowling team jerseys to fraternity/sorority apparel to special event shirts, summer league baseball and softball team jerseys are the company's biggest source of revenue. A portion of Leslie's operating information for the company's last year follows: Number of Operating Month Jerseys Printed Cost $5,735 January February 200 205 5,830 8,690 9,800 March 575 April Мay 680 625 9,275 6,230 June 410 July August September October 390 6,140 5,940 4,810 230 180 305 6,005 5,960 4,955 November 235 December 190 Required: 3. Using the high-low method, calculate the store's total fixed operating costs and variable operating cost per jersey. 4. Using the high-low method results, calculate the store's expected operating cost if it printed 455 jerseys. 5. Perform a least-squares…
Current Attempt in Progress You have been asked to help the local commercial radio station prepare its business plan for the upcoming year. The radio station operates for 18 hours a day (6 a.m. to midnight) seven days a week, all year. It broadcasts on average 15 minutes of on-air advertising per hour. To sell the advertising time, the station uses commissioned sales staff who are paid a base salary plus commission that varies according to the volume of sales. The station manager asks you to calculate how many hours of advertising it would need to sell in order to break even. (a) Select the fixed costs and the variable costs. Rent • Utilities (heat, light, water) Property and business taxes Management salaries and benefits Marketing costs for the station • Sales force base salaries Costs of production of on-air commercial • Advertising sales commission
Balcom Enterprises is planning to introduce a new product that will sell for $120 a unit. Manufacturing cost estimates for 28,000 units for the first year of production are: Direct materials $1,372,000. Direct labor $1,008,000 (based on $18 per hour × 56,000 hours). Although overhead has not be estimated for the new product, monthly data for Balcom's total production for the last two years has been analyzed using simple linear regression. The analysis results are as follows: Dependent variable Factory overhead costs Independent variable Direct labor hours Intercept $ 136,000 Coefficient on independent variable $ 5.00 Coefficient of correlation 0.959 R2 0.846 Based on this information, how much is the variable manufacturing cost per unit, using the variable overhead estimated by the regression (assuming that direct materials and direct labor are variable costs)? Multiple Choice $72 $92 $95 $77
The Soma Inn is trying to determine its break-even point. The inn has 75 rooms that are rented at $56 a night. Operating costs are as follows. Salaries Utilities Depreciation Maintenance Maid service Other costs $10,600 per month 2.600 per month 1,400 per month 700 per month 7 31 per room 2 Determine the inn's break-even point in (1) number of rented rooms per month and (2) dlars. per room Break-even point in rooms Break-even point
Andy’s Water Pets Inc. makes 100-gallon plexiglass aquariums. They reported the following financial information for last year: Direct labor: 9,000 hours @ $20 per hr. Production manager salary: $75,000 Factory rent: $36,000 Equipment maintenance: $15,000 (considered a variable expense) Equipment depreciation: $15,000 Production for the year: 12,000 units Total Revenue: $1,500,000 Total aquariums sold during the period: 15,000 units Operating Income under variable costing (after non-production expenses): $306,000 Assume that the fixed costs were the same on a per-unit basis during the prior period.What would Operating Income be under absorption costing? (Round per-unit costs to the nearest cent.) Select one: a. $341,235 b. None of these options are correct. c. $270,765 d. $337,500 e. $274,500
Wet Pets Inc. makes 100-gallon plexiglass aquariums. They reported the following financial information for last year: Direct labor: 6,600 hours @ $20 per hr Production manager salary: $55,000 Factory rent: $26,400 Equipment maintenance: $11,000 (considered a variable expense) Equipment depreciation: $11,000 Production for the year: 12,000 units Total Revenue: $1,100,000 Total aquariums sold during the period: 10,000 units Operating Income under absorption costing (after non-production expenses): $224,400 Assume that the fixed costs were the same on a per-unit basis during the prior period. What would Operating Income be under variable costing? (Round per-unit costs to the nearest cent.) Select one: O a. $209,000 b. $207,166 c. None of these options are correct. OO O d. $239,800 O e. $241,626

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