
Cost Accounting
15th Edition
ISBN: 9780133428834
Author: Horngren
Publisher: PEARSON
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Textbook Question
Chapter 10, Problem 10.18E
Various cost-behavior patterns. (CPA, adapted).
The vertical axes of the graphs below represent total cost, and the horizontal axes represent units produced during a calendar year. In each case, the zero point of dollars and production is at the intersection of the two axes.
Select the graph that matches the numbered
Required
- 1. Annual
depreciation of equipment where the amount of depreciation charged is computed by the machine-hours method. - 2. Electricity bill—a flat fixed charge, plus a variable cost after a certain number of kilowatt-hours are used, in which the quantity of kilowatt-hours used varies proportionately with quantity of units produced.
- 3. City water bill, which is computed as follows:
First 1,000,000 gallons or less | $1,000 flat fee |
Next 10,000 gallons | $0.003 per gallon used |
Next 10,000 gallons | $0.006 per gallon used |
Next 10,000 gallons | $0.009 per gallon used |
and so on | and so on |
The gallons of water used vary proportionately with the quantity of production output.
- 4. Cost of direct materials, where direct material cost per unit produced decreases with each pound of material used (for example, if 1 pound is used, the cost is $10; if 2 pounds are used, the cost is $19.98; if 3 pounds are used, the cost is $29.94), with a minimum cost per unit of $9.20.
- 5. Annual depreciation of equipment, where the amount is computed by the straight-line method. When the depreciation schedule was prepared, it was anticipated that the obsolescence factor would be greater than the wear-and-tear factor.
- 6. Rent on a manufacturing plant donated by the city, where the agreement calls for a fixed-fee payment unless 200,000 labor-hours are worked, in which case no rent is paid.
- 7. Salaries of repair personnel, where one person is needed for every 1,000 machine-hours or less (that is, 0 to 1,000 hours requires one person, 1,001 to 2,000 hours requires two people, and so on).
- 8. Cost of direct materials used (assume no quantity discounts).
- 9. Rent on a manufacturing plant donated by the county, where the agreement calls for rent of $100,000 to be reduced by $1 for each direct manufacturing labor-hour worked in excess of 200,000 hours, but a minimum rental fee of $20,000 must be paid.
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Chapter 10 Solutions
Cost Accounting
Ch. 10 - What two assumptions are frequently made when...Ch. 10 - Describe three alternative linear cost functions.Ch. 10 - What is the difference between a linear and a...Ch. 10 - High correlation between two variables means that...Ch. 10 - Name four approaches to estimating a cost...Ch. 10 - Describe the conference method for estimating a...Ch. 10 - Describe the account analysis method for...Ch. 10 - List the six steps in estimating a cost function...Ch. 10 - When using the high-low method, should you base...Ch. 10 - Describe three criteria for evaluating cost...
Ch. 10 - Define learning curve. Outline two models that can...Ch. 10 - Discuss four frequently encountered problems when...Ch. 10 - Prob. 10.13QCh. 10 - All the independent variables in a cost function...Ch. 10 - Multicollinearity exists when the dependent...Ch. 10 - Prob. 10.16ECh. 10 - Prob. 10.17ECh. 10 - Various cost-behavior patterns. (CPA, adapted)....Ch. 10 - Matching graphs with descriptions of cost and...Ch. 10 - Prob. 10.20ECh. 10 - Prob. 10.21ECh. 10 - Prob. 10.22ECh. 10 - Prob. 10.23ECh. 10 - Prob. 10.24ECh. 10 - Prob. 10.25ECh. 10 - Prob. 10.26ECh. 10 - Prob. 10.27ECh. 10 - Learning curve, cumulative average-time learning...Ch. 10 - Learning curve, incremental unit-time learning...Ch. 10 - Prob. 10.30ECh. 10 - Prob. 10.31PCh. 10 - Prob. 10.32PCh. 10 - Prob. 10.33PCh. 10 - Interpreting regression results. Spirit...Ch. 10 - Prob. 10.35PCh. 10 - Prob. 10.36PCh. 10 - Regression; choosing among models. Apollo Hospital...Ch. 10 - Multiple regression (continuation of 10-42). After...Ch. 10 - Prob. 10.39PCh. 10 - Prob. 10.40PCh. 10 - Interpreting regression results, matching time...Ch. 10 - Prob. 10.42PCh. 10 - Prob. 10.43P
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