Variable Costing Income Statement for a Service CompanyThe actual and planned data for Underwater University for the Fall term were as follows:ActualPlannedEnrollment4,5004,125Tuition per credit hour$120$135Credit hours43,20060,450Registration, records, and marketing costs per enrolled student$275$275Instructional costs per credit hour$60$64Depreciation on classrooms and equipment$825,600$825,600Registration, records, and marketing costs vary by the number of enrolled students, while instructional costs vary by the number of credit hours.Depreciation is a fixed cost.Prepare a variable costing income statement showing the contribution margin and operating income for the Fall term. Underwater UniversityVariable Costing Income StatementFor the Fall TermRevenueVariable costs:Registration, records, and marketing costsInstructional costsTotal variable costsContribution marginDepreciation on classrooms and equipmentOperating income

Variable Costing:Variable costing is the method that is used by the management for decision making…

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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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Costs associated with two alternatives, code-named Q and R, being considered by Albiston Con Supplies costs Power costs Inspection costs Assembly costs a. Supplies costs a. Power costs Alternative Q Alternative R $ 67,000 $ 67,000 $ 31,000 $ 30,100 $ 30,100 $ 35,000 Required: a. Which costs are relevant and which are not relevant in the choice between these two alternat b. What is the differential cost between the two alternatives? a. Inspection costs a. Assembly costs b. Differential cost $ 21,000 $ 35,000 ६
The variable overhead spending variance is most effective in measuring: O how well overhead spending matches the targets set in the original budget at the beginning of the year. O the efficiency with which the activity base was utilized in production. O the excessive use of overhead resources. O the utilization of plant facilities.
When using a standard cost system what is the report that summarizes actual costs, standard costs, and the differences for the units produced called? Group of answer choices variable performance report budget performance report static report none of the above
1. Compute an activity rate for each activity using activity-based costing.
Garrell Corporation is conducting a time-driven activity-based costing study in its Customer Support Department. The company has provided the following data to aid in that study: Time-driven activity rate (cost per unit of activity) Activity cost pool: Receiving Calls Resolving Issues Settling Disputes Cost Object Data: Number of calls received Number of issues resolved Number of disputes settled Customer P 31 17 1 $5.46 $8.58 $13.26 Customer Q 21 10 Required: Using time-driven activity-based costing, determine the total Customer Support Department cost assigned to cach customer.
25. A standard cost Multiple Choice a)is the average cost within an industry b)is useful in calculating equivalent units c)is a budget for the production of one unit of a product d)incorporates the opportunity cost of a unit of production e)shows the actual cost from previous years
Mastery Problem: Contribution Margin, Cost-Volume-Profit Analysis and Break-Even Point (Overview) Fixed, Variable and Mixed Costs An appreciation of cost behavior is needed in order for management to understand and predict profitability as the costs of material, labor and other operating expenses and levels of production and sales change. It's important to review the cost behavior of fixed, variable and mixed costs before contribution margins, cost-volume-profit analysis, and break-even points. 1. In the table below, Have-A-Seat Inc. has outlined many of the costs associated with producing office chairs. With respect to the production and sale of office chairs, classify each cost as: a.fixed b.mixed c.variable. a. Pressure-molded plastic for chair frames b. Pension cost: $0.50 per employee hour on the job c. Insurance premiums for inventory: $2,100 per month plus $0.01 for each dollar of inventory over $2 million d. Property taxes: $120,000 per year for…
As production increases, the fixed cost per unit a. decreases b. remains the same c. increases d. either increases or decreases, depending on the variable costs Standard costs are divided into which of the following components? a. price standard and quantity standard b. quality standard and quantity standard c. variance standard and quantity standard d. materials standard and labor standard Which of the following activity bases would be the most appropriate for food costs of a hospital? a. how many MRI's are taken b. number of patients who stay in the hospital c. quantity of prescriptions filled d. number of nurses scheduled to work
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Indicate whether the items below are used as key performance indicators for the areas Quantity variance on a cost report *(A) Financial(B) Customer(C) Internal Process(D) Learning and Growth performance.
Itranscript A company executive assigned importance values between 0 and 100 to five attributes included in an alternative evaluation process. Determine the weight of each attribute using the importance scores. Importance Score, si Attribute, i Safety Cost Production rate Environmental Maintainability The weight of safety is The weight of cost is The weight of production rate is The weight of environmental is The weight of maintainability is 58 50 88 28 44
Contribution Margin, Cost-Volume-Profit Analysis and Break-Even Point (Overview) Fixed, Variable and Mixed Costs An appreciation of cost behavior is needed in order for management to understand and predict profitability as the costs of material, labor and other operating expenses and levels of production and sales change. It's important to review the cost behavior of fixed, variable and mixed costs before contribution margins, cost-volume-profit analysis, and break-even points. 1. In the table below, Have-A-Seat Inc. has outlined many of the costs associated with producing office chairs. With respect to the production and sale of office chairs, classify each cost as fixed, mixed, or variable. a. Pressure-molded plastic for chair frames b. Pension cost: $0.50 per employee hour on the job c. Insurance premiums for inventory: $2,100 per month plus $0.01 for each dollar of inventory over $2 million d. Property taxes: $120,000 per year for the factory building and…

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