Need Provide Answer Zerbel Company, a wholesaler of large, custom-built air conditioning unitsfor commercial buildings, has noticed considerable fluctuation in its shippingexpense from month to month:Units Total Shipping Shipped ExpenseMonthJanuary 4February 7March 5April2May3June6July8$2,200$3,100$2,600$1,500$2,200$3,000$3,600Using the high-low method, estimate the cost formula for shippingexpense.

Step 1: Definition of High-Low Method:The high-low method is used to separate mixed costs into their…

Answered: Zerbel Company, a wholesaler of large,…

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter16: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 35P

See similar textbooks

Similar questions

Carla Vista Company produces a molded briefcase that is distributed to luggage stores. The following operating data for the current year has been accumulated for planning purposes. Sales price Variable cost of goods sold Variable selling expenses Variable administrative expenses Annual fixed expenses Overhead Selling expenses Administrative expenses (a) $80 * Your answer is incorrect. 21.20 24 Break even units $9,400,000 Carla Vista can produce 1.5 million cases a year. The projected net income for the coming year is expected to be $2,100,000. Carla Vista is subject to a 40% income tax rate. 6 1,550,000 During the planning sessions, Carla Vista's managers have been reviewing costs and expenses. They estimate that the company's variable cost of goods sold will increase 20% in the coming year and that fixed administrative expenses will increase by $120,000. All other costs and expenses are expected to remain the same. 3,250,000 Carla Vista Company's managers are considering expanding the…
Suppose that Stillwater Designs has two classes of distributors: JIT distributors and non-JIT distributors. The JIT distributor places small, frequent orders, and the non-JIT distributor tends to place larger, less frequent orders. Both types of distributors are buying the same product. Stillwater Designs provides the following information about customer-related activities and costs for the most recent quarter: JITDistributors Non-JITDistributors Sales orders 1,000 100 Sales calls 70 70 Service calls 350 175 Average order size 650 6,500 Manufacturing cost/unit $125 $125 Customer costs: Processing sales orders $3,380,000 Selling goods 1,120,000 Servicing goods 1,050,000 Total $5,550,000 Required: 1. Calculate the total revenues per distributor category, and assign the customer costs to each distributor type by using revenues as the allocation base. Selling price for one unit is $150. Round calculations to the nearest dollar. JIT…
Memofax Inc. produces memory enhancement kits for fax machines. Sales have been very erratic, with some months showing a profit and some months showing a loss. The company's contribution format income statement for the most recent month is given below. Sales (12,600 units at $40 per unit $504,000 Variable 202.40 *
What is the economic order quantity?
Widget Co. produces widgets for customers. The company has provided the following financial information for the past year. Each scenario below is separate. Product Selling price per unit Sales Quantity Variable cost per unit Fixed costs Widgets $9.00 528,000 $2.00 $67,000 Do not enter dollar signs or commas in the input boxes. Round breakeven units up to the nearest whole number. Round breakeven sales to the nearest whole number. a) Calculate break-even units and break-even sales. Breakeven units = Breakeven sales = $ b) Suppose the company would like to generate an operating profit of $5,000. Determine the revenue that is needed to obtain this target, and calculate the number of units that need to be produced to meet this goal. Breakeven units = Breakeven sales = $ c) Suppose the company decides to lower the selling price from $9.00 per unit to $8.00 per unit. Calculate break-even units and break- even sales. Breakeven units = Breakeven sales = $ d) Suppose that fixed costs drop to…
Memofax Inc. produces memory enhancement kits for fax machines. Sales have been very erratic, with some months showing a profit and some months showing a loss. The company's contribution format income statement for the most recent month is given below. Sales (12,600 units at $40 per unit $504,000 Variable expenses Contribution margin Fixed expenses 302,400 201,600 Net operating loss 225,600 $(24,000) The sales manager feels that a $7,700 increase in the monthly advertising budget, combined with an intensified effort by the sales staff, will result in a $73,000 increase in monthly sales. If the sales manager is right, what will the revised net operating income or loss?
Preppy Co. makes and sells a single product. The current selling price is $30 per unit. Variable costs are $21 per unit, and fixed expenses total $90,000 per month. Sales volume for July totaled 12,000 units. (a) Calculate the operating income for July. (b) Calculate the break-even point in units sold and total revenues. (c) Management is considering the use of automated production equipment. If this were done, variable costs would drop to $15.00 per unit, but fixed expenses would increase to $100,000 per month. (1.) Calculate operating income at a volume of 12,000 units per month with the new cost structure. (2.) Calculate the break-even point in units with the new cost structure.
Global GPS industries assembles its GPS systems with the following costs. Each or requires one computer system and 4 batteries. Computer systems cost $140 each, and Batteries are $2.50 each. Global is able to reliably obtain computers as needed and does not maintain them in inventory. However, batteries are stocked in inventory sufficient to produce 20% of the following month's expected production. Planned production is as follows: January February March April 24,000 systems 39,750 systems 23,850 systems 25,000 systems BB batter Compute No end/No Required: Prepare a direct material purchasing plan for January, February, and March based on the above facts.
Premium Beds is a retailer of luxury bed frames located in Los Angeles, California. Due to a recent industry-wide financial crisis, the CFO of Premium Beds fears a significant drop in the firm's upcoming income stream. The CFO asked you to use the company financial information provided below. Sales price per unit $ 3,000.00 Per-unit variable costs: Invoice cost 2,218.80 Sales commissions 281.20 Total per-unit variable costs $ 2,500.00 Total annual fixed costs: Advertising $ 236,000 Rent 178,000 Salaries 386,000 Total annual fixed costs $ 800,000 The annual breakeven point in dollars is: $4,800,000. $4,500,000. $4,100,000. $4,600,000. $4,300,000.
A supplier ships goods from Richmond, VA to three market places in 3 cities (Chicago, IL; Athens, GA; St. Luis, MO). The supplier can ship every day, every other day, or every third day. There is a penalty of $0.30/cwt for each day delayed. Consolidating shipments allows for lower transportation costs from larger loads, but incurs penalty costs due to the delay. Transportation Rate (S/cwt) Shipment City Weight/day LTL 50,000 lb 50000 Ib Chicago, IL 18,000 lb (180 cwt) 1.50 1.25 Athens, GA 15,000 lb (150 cwt) 1.35 1.00 St. Luis, MO 12,000 lb (120 cwt) 2.00 1.50 Total 45,000 lb = 450 cwt Find what is the cost for the following: Shipping Every Day Shipping on the alternate Day (every two days) Shipping every three Day
Sleepy Time is a retailer of luxury bed frames located in Los Angeles, California. Due to a recent industry-wide financial crisis, the CFO of Sleepy Time fears a significant drop in the firm's upcoming income stream. The CFO asked you to use the company financial information provided below. Sales price per unit $ 3,250.00 Per-unit variable costs: Invoice cost 2,468.80 Sales commissions 331.20 Total per-unit variable costs $ 2,800.00 Total annual fixed costs: Advertising $ 236,500 Rent 178,500 Salaries 386,500 Total annual fixed costs $ 801,500 If 4,250 bed frames were sold, Sleepy Time's operating income (πB) would be: (Do not round intermediate calculations.)
I need some help with this problem

SEE MORE QUESTIONS

Recommended textbooks for you

Cornerstones of Cost Management (Cornerstones Ser…

Accounting

ISBN:

9781305970663

Author:

Don R. Hansen, Maryanne M. Mowen

Publisher:

Cengage Learning