Managerial Accounting + Connect Access Card
7th Edition
ISBN: 9781260581263
Author: John Wild
Publisher: McGraw-Hill College
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Chapter 10, Problem 21QS
To determine
Concept introduction:
Time and Materials Pricing:
Time and materials pricing can be applied in service industry for a service contract wherein materials are supplied along with such contract. Thus, the price is charged for actual materials consumed and labor hours worked during such service contract.
Requirement 1:
To compute the amount to be charged per hour of direct labor, considering a target profit margin of 30% for the company.
To determine
Concept introduction:
Time and Materials Pricing:
Time and materials pricing can be applied in service industry for a service contract wherein materials are supplied along with such contract. Thus, the price is charged for actual materials consumed and labor hours worked during such service contract.
Requirement 2:
To compute the materials markup in percentage of the total cost for the company.
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Discussion QuestionThe table below shows monthly data collected on production costs and on the number of unitsproduced over a twelve month period.Month Total ProductionCostsLevel of Activity(Units Produced)July $230,000 3,500August 250,000 3,750September 260,000 3,800October 220,000 3,400November 340,000 5,800December 330,000 5,500January 200,000 2,900February 210,000 3,300March 240,000 3,600April 380,000 5,900May 350,000 5,600June 290,000 5,000a) Determine the variable cost per unit and the fixed cost using the high-low method.b) What is the equation of the total mixed cost function?c) Based on the High-Low method, what is the total production costs if 6,500 units areproduced?d) Prepare the scatter diagram and insert the trendline or line of best-fit. Use a scale of 2cm to represent 1,000 units on the x-axis & 2 cm to represent $50,000 on the yaxis.e) Using the line of best-fit, determine the company’s fixed cost per month and the variablecost per unit. (Use 0 & 5,000…
Interpreting Cost Formula
Wylie Enterprises' controller, Josh Senior, estimated the following formula, based on monthly data, for total overhead cost:
Overhead costs = $173,500+ ($43.50 x Direct labor hours)
Required
1) Link each term in Column A to the corresponding term in Column B
Column B
Column A
Overhead cost
$173,500
$43.50
Direct labor hours
2) If next month's budgeted direct labor hours equal 8,000, and are within the relevant range, what is the budgeted overhead cost?
$0
→
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3) If next quarter's budgeted direct labor hours equal 26,000, and are within the relevant range, what is the budgeted overhead cost?
$0
4) If next year's budgeted direct labor hours equal 101,250, and are within the relevant range, what is the budgeted overhead cost?
$0
Question 1
Shiashi Ltd is preparing its manufacturing overhead budget for 2024. Relevant data consist of the
following:
- Units to be produced (by quarters): 20,000, 24,000, 34,000 and 36,000.
Direct labour: Time is 1.5 hours per unit.
Variable overhead costs per direct labour hour: Indirect materials GH¢1.40;
indirect labour GH 2.40 and maintenance $1.50.
Fixed overhead costs per quarter: Supervisory salaries GH 55,000; depreciation
GH 27,000 and maintenance GH¢25,000.
a) You are required to prepare the manufacturing overhead budget for the year, showing
quarterly data.
b) What does an organisation stand to gain by preparing annual budgets for its operations?
c) Describe the budgeting process of any business entity that you are familiar with.
Chapter 10 Solutions
Managerial Accounting + Connect Access Card
Ch. 10 - Prob. 1MCQCh. 10 - Prob. 2MCQCh. 10 - Prob. 3MCQCh. 10 - Prob. 4MCQCh. 10 - Prob. 5MCQCh. 10 - Prob. 1DQCh. 10 - Is nonfinancial information ever useful in...Ch. 10 - What is a relevant cost? Identify the two types of...Ch. 10 - Prob. 4DQCh. 10 - Prob. 5DQ
Ch. 10 - Prob. 6DQCh. 10 - Prob. 7DQCh. 10 - Prob. 8DQCh. 10 - Prob. 9DQCh. 10 - Prob. 10DQCh. 10 - Explain how a price-setter differs from a...Ch. 10 - Prob. 12DQCh. 10 - Prob. 1QSCh. 10 - Prob. 2QSCh. 10 - Prob. 3QSCh. 10 - Prob. 4QSCh. 10 - Prob. 5QSCh. 10 - Prob. 15QSCh. 10 - Prob. 6QSCh. 10 - Prob. 7QSCh. 10 - Prob. 10QSCh. 10 - Prob. 8QSCh. 10 - Prob. 9QSCh. 10 - Prob. 11QSCh. 10 - Prob. 12QSCh. 10 - Prob. 13QSCh. 10 - Prob. 14QSCh. 10 - Prob. 16QSCh. 10 - Prob. 17QSCh. 10 - Prob. 18QSCh. 10 - Raju is & price-taker in a competitive product...Ch. 10 - Prob. 20QSCh. 10 - Prob. 21QSCh. 10 - Prob. 1ECh. 10 - Exercise 23-5 Make or buy A1 Gelb Company...Ch. 10 - Prob. 3ECh. 10 - Prob. 4ECh. 10 - Prob. 5ECh. 10 - Prob. 6ECh. 10 - Exercise 23-11 Sales mix A1 Childress Company...Ch. 10 - Prob. 8ECh. 10 - Prob. 9ECh. 10 - Prob. 10ECh. 10 - Prob. 11ECh. 10 - Prob. 12ECh. 10 - Prob. 13ECh. 10 - Exercise 23-3 Accept new business or nor...Ch. 10 - Prob. 15ECh. 10 - Prob. 1PSACh. 10 - Prob. 2PSACh. 10 - Prob. 3PSACh. 10 - Prob. 4PSACh. 10 - Prob. 5PSACh. 10 - Prob. 6PSACh. 10 - Prob. 1PSBCh. 10 - Prob. 2PSBCh. 10 - Prob. 3PSBCh. 10 - Prob. 4PSBCh. 10 - Prob. 5PSBCh. 10 - Prob. 6PSBCh. 10 - Prob. 10SPCh. 10 - Assume Apple is designing a new smartphone. Each...Ch. 10 - Prob. 2AACh. 10 - Assume Samsung is designing a new smartphone. Each...Ch. 10 - Prob. 1BTNCh. 10 - Prob. 2BTNCh. 10 - Prob. 3BTNCh. 10 - Prob. 4BTNCh. 10 - Prob. 5BTNCh. 10 - Prob. 6BTN
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