a.
Concept Introduction:
Activity level is defined as how an activity is used by a cost object / other activity. Different activity often has different cost drivers. The five levels of activities are unit-level activities, batch-level activities, customer-level activities, production level activities and organization sustaining activities. Maximum contribution at a particular level of activity will show the maximum profitability position.
To explain: The effect of an increase in activity level on average fixed costs per unit.
b.
Concept Introduction:
Activity level is defined as how an activity is used by a cost object / other activity. Different activity often has different cost drivers. The five levels of activities are unit-level activities, batch-level activities, customer-level activities, production level activities and organization sustaining activities. Maximum contribution at a particular level of activity will show the maximum profitability position.
To explain: The effect of an increase in activity level on variable costs per unit.
c.
Concept Introduction:
Activity level is defined as how an activity is used by a cost object / other activity. Different activity often has different cost drivers. The five levels of activities are unit-level activities, batch-level activities, customer-level activities, production level activities and organization sustaining activities. Maximum contribution at a particular level of activity will show the maximum profitability position.
To explain: The effect of an increase in activity level on total fixed costs.
d.
Concept Introduction:
Activity level is defined as how an activity is used by a cost object / other activity. Different activity often has different cost drivers. The five levels of activities are unit-level activities, batch-level activities, customer-level activities, production level activities and organization sustaining activities. Maximum contribution at a particular level of activity will show the maximum profitability position.
To explain: The effect of an increase in activity level on total variable costs.
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Chapter 1 Solutions
Managerial Accounting
- Questions related acc.arrow_forwardKindly help me with accounting questionsarrow_forwardhe beginning inventory for Dunne Co. and data on purchases and sales for a three-month period are as follows: Date Transaction Numberof Units Per Unit Total Apr. 3 Inventory 25 $1,200 $30,000 8 Purchase 75 1,240 93,000 11 Sale 40 2,000 80,000 30 Sale 30 2,000 60,000 May 8 Purchase 60 1,260 75,600 10 Sale 50 2,000 100,000 19 Sale 20 2,000 40,000 28 Purchase 80 1,260 100,800 June 5 Sale 40 2,250 90,000 16 Sale 25 2,250 56,250 21 Purchase 35 1,264 44,240 28 Sale 44 2,250 99,000arrow_forward
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- The beginning inventory at Smith Co. and data on purchases and sales for a three-month period ending June 30 are... Date Transaction Numberof Units Per Unit Total Apr. 3 Inventory 48 $450 $21,600 8 Purchase 96 540 51,840 11 Sale 64 1,500 96,000 30 Sale 40 1,500 60,000 May 8 Purchase 80 600 48,000 10 Sale 48 1,500 72,000 19 Sale 24 1,500 36,000 28 Purchase 80 660 52,800 June 5 Sale 48 1,575 75,600 16 Sale 64 1,575 100,800 21 Purchase 144 720 103,680 28 Sale 72 1,575 113,400 Record inventory, purchases, cost of merchandise sold data in perpetual invetory record similar to the one illutrated in exhibit 3 using FIFO. Under FIFO if units at two different costs eneter the units with the lower unit cost first in the cost of goods sold unit cost column and in the inventory unit cost column.arrow_forwardSummit Manufacturing has a standard costing system. The following data are available for October: • • Actual quantity of direct materials purchased: 40,000 pounds Standard price of direct materials: $6 per pound Material price variance: $4,800 unfavorable Material quantity variance: $3,200 favorable What is the actual price per pound of direct materials purchased in October?arrow_forwardI want to correct answer general accounting questionarrow_forward
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