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 15E

1.

To determine

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

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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The following lots of Commodity Z were available for sale during the year. Beginning inventory First purchase Second purchase Third purchase 10 units at $30 25 units at $32 30 units at $34 10 units at $35 The firm uses the periodic inventory system, and there are 20 units of the commodity on hand at the end of the year. What is the ending inventory balance of Commodity Z using the weighted average cost method? a. $620 b. $659 c. $690 d. $655

Assume that three identical units of merchandise were purchased during October, as follows: Units Cost Oct. 5 Purchase 1 $ 5 12 Purchase 1 13 28 Purchase 1 15 Total 3 $33 One unit is sold on October 31 for $28. Using the table provided, determine the cost of goods sold using the weighted average cost method. a. $11 b. $17 c. $13 d. $22

Answer 2

Question

Chapter 11, Problem 15E

1.

To determine

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

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 15E

1.

To determine

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

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 15E

1.

To determine

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

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 15E

1.

To determine

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

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 15E

1.

To determine

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 15E

1.

To determine

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

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

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. 1Q Ch. 11 - Prob. 2Q Ch. 11 - Prob. 3Q Ch. 11 - Prob. 4Q Ch. 11 - Prob. 5Q Ch. 11 - Prob. 6Q Ch. 11 - Prob. 7Q Ch. 11 - Prob. 8Q Ch. 11 - Prob. 9Q Ch. 11 - Prob. 10Q

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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