Total variable costs have a direct relationship with the activity base. It increases or decreases in approximate proportion to increase or decrease in the activity base respectively. Total fixed costs do not change with the change in activity base provided that activities are performed within the relevant range. Fixed costs are period costs such as rent, interest on loans, and depreciation. These costs have to be paid whether production occurs or not. That is why fixed costs remain the same at all levels of production. The Medical Services Department charges the Cutting Department, Milling Department, and Assembly Department.

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Answer 1

Question

Chapter 11, Problem 11.15E

1.

To determine

Introduction: Total variable costs have a direct relationship with the activity base. It increases or decreases in approximate proportion to increase or decrease in the activity base respectively.

Total fixed costs do not change with the change in activity base provided that activities are performed within the relevant range. Fixed costs are period costs such as rent, interest on loans, and depreciation. These costs have to be paid whether production occurs or not. That is why fixed costs remain the same at all levels of production.

The Medical Services Department charges the Cutting Department, Milling Department, and Assembly Department.

2.

To determine

Introduction: Spending variance shows the relationship between the budgeted cost and the actual cost incurred. If the budgeted cost is more than the actual cost incurred, then it is termed a favorable spending variance and vice versa.

The costs that should be treated as a spending variance and not charged to the operating departments.

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Answer 2

Question

Chapter 11, Problem 11.15E

1.

To determine

Introduction: Total variable costs have a direct relationship with the activity base. It increases or decreases in approximate proportion to increase or decrease in the activity base respectively.

Total fixed costs do not change with the change in activity base provided that activities are performed within the relevant range. Fixed costs are period costs such as rent, interest on loans, and depreciation. These costs have to be paid whether production occurs or not. That is why fixed costs remain the same at all levels of production.

The Medical Services Department charges the Cutting Department, Milling Department, and Assembly Department.

2.

To determine

Introduction: Spending variance shows the relationship between the budgeted cost and the actual cost incurred. If the budgeted cost is more than the actual cost incurred, then it is termed a favorable spending variance and vice versa.

The costs that should be treated as a spending variance and not charged to the operating departments.

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Answer 3

Question

Chapter 11, Problem 11.15E

1.

To determine

Introduction: Total variable costs have a direct relationship with the activity base. It increases or decreases in approximate proportion to increase or decrease in the activity base respectively.

Total fixed costs do not change with the change in activity base provided that activities are performed within the relevant range. Fixed costs are period costs such as rent, interest on loans, and depreciation. These costs have to be paid whether production occurs or not. That is why fixed costs remain the same at all levels of production.

The Medical Services Department charges the Cutting Department, Milling Department, and Assembly Department.

2.

To determine

Introduction: Spending variance shows the relationship between the budgeted cost and the actual cost incurred. If the budgeted cost is more than the actual cost incurred, then it is termed a favorable spending variance and vice versa.

The costs that should be treated as a spending variance and not charged to the operating departments.

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Answer 4

Question

Chapter 11, Problem 11.15E

1.

To determine

Introduction: Total variable costs have a direct relationship with the activity base. It increases or decreases in approximate proportion to increase or decrease in the activity base respectively.

Total fixed costs do not change with the change in activity base provided that activities are performed within the relevant range. Fixed costs are period costs such as rent, interest on loans, and depreciation. These costs have to be paid whether production occurs or not. That is why fixed costs remain the same at all levels of production.

The Medical Services Department charges the Cutting Department, Milling Department, and Assembly Department.

2.

To determine

Introduction: Spending variance shows the relationship between the budgeted cost and the actual cost incurred. If the budgeted cost is more than the actual cost incurred, then it is termed a favorable spending variance and vice versa.

The costs that should be treated as a spending variance and not charged to the operating departments.

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Answer 5

Chapter 11, Problem 11.15E

1.

To determine

Introduction: Total variable costs have a direct relationship with the activity base. It increases or decreases in approximate proportion to increase or decrease in the activity base respectively.

Total fixed costs do not change with the change in activity base provided that activities are performed within the relevant range. Fixed costs are period costs such as rent, interest on loans, and depreciation. These costs have to be paid whether production occurs or not. That is why fixed costs remain the same at all levels of production.

The Medical Services Department charges the Cutting Department, Milling Department, and Assembly Department.

2.

To determine

Introduction: Spending variance shows the relationship between the budgeted cost and the actual cost incurred. If the budgeted cost is more than the actual cost incurred, then it is termed a favorable spending variance and vice versa.

The costs that should be treated as a spending variance and not charged to the operating departments.

Answer 6

Chapter 11, Problem 11.15E

1.

To determine

Introduction: Total variable costs have a direct relationship with the activity base. It increases or decreases in approximate proportion to increase or decrease in the activity base respectively.

Total fixed costs do not change with the change in activity base provided that activities are performed within the relevant range. Fixed costs are period costs such as rent, interest on loans, and depreciation. These costs have to be paid whether production occurs or not. That is why fixed costs remain the same at all levels of production.

The Medical Services Department charges the Cutting Department, Milling Department, and Assembly Department.

Answer 7

Chapter 11, Problem 11.15E

1.

To determine

Introduction: Total variable costs have a direct relationship with the activity base. It increases or decreases in approximate proportion to increase or decrease in the activity base respectively.

Total fixed costs do not change with the change in activity base provided that activities are performed within the relevant range. Fixed costs are period costs such as rent, interest on loans, and depreciation. These costs have to be paid whether production occurs or not. That is why fixed costs remain the same at all levels of production.

The Medical Services Department charges the Cutting Department, Milling Department, and Assembly Department.

Answer 8

2.

To determine

Introduction: Spending variance shows the relationship between the budgeted cost and the actual cost incurred. If the budgeted cost is more than the actual cost incurred, then it is termed a favorable spending variance and vice versa.

The costs that should be treated as a spending variance and not charged to the operating departments.

Answer 9

2.

To determine

Introduction: Spending variance shows the relationship between the budgeted cost and the actual cost incurred. If the budgeted cost is more than the actual cost incurred, then it is termed a favorable spending variance and vice versa.

The costs that should be treated as a spending variance and not charged to the operating departments.

Answer 10

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Answer 11

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Answer 12

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Answer 13

Ch. 11 - Prob. 11.1Q Ch. 11 - Prob. 11.2Q Ch. 11 - Prob. 11.3Q Ch. 11 - Prob. 11.4Q Ch. 11 - Prob. 11.5Q Ch. 11 - Prob. 11.6Q Ch. 11 - Prob. 11.7Q Ch. 11 - Prob. 11.8Q Ch. 11 - Prob. 11.9Q Ch. 11 - Why is using sales dollars as an allocation base...

Solution Summary: The author explains that total variable costs have a direct relationship with the activity base. Fixed costs are period costs such as rent, interest on loans, and depreciation.

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