Explain how total amount of fixed cost is affected by changes in cost driver.

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Answer 1

Question

Chapter 12, Problem 17P

a)

To determine

Explain how total amount of fixed cost is affected by changes in cost driver.

b)

To determine

Explain how total amount of fixed cost per unit is affected by changes in cost driver.

c)

To determine

Whether expert’s salary is an indirect cost or direct cost when cost objective is to ascertain the cost per tent.

d)

To determine

Determine the amount of salary of expert allocated to tents in the month of January and February.

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The weighted average contribution margin is?

Use the information provided by iLembe Enterprises to answer the following questions independently. The expanded contribution margin model must be used to answer questions 3.3 to 3.5. 3.1 Use the contribution margin ratio to calculate the break-even value. 3.2 Determine the selling price per unit (expressed to the nearest cent) that will enable iLembe Enterprises to break even. 3.3 Calculate the sales volume required to achieve an operating profit of R2 001 000. 3.4 Calculate the total Contribution Margin and Operating Profit/Loss if the sales price drops by 10%. 3.5 The management of iLembe Enterprises is considering an increase of R100 000 in the advertising expenditure with the expectation that the sales volume will increase by 1 000 units. Will the profitability improve? Motivate your answer with the relevant calculations

Answer 2

Question

Chapter 12, Problem 17P

a)

To determine

Explain how total amount of fixed cost is affected by changes in cost driver.

b)

To determine

Explain how total amount of fixed cost per unit is affected by changes in cost driver.

c)

To determine

Whether expert’s salary is an indirect cost or direct cost when cost objective is to ascertain the cost per tent.

d)

To determine

Determine the amount of salary of expert allocated to tents in the month of January and February.

Expert Solution & Answer

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Answer 3

Question

Chapter 12, Problem 17P

a)

To determine

Explain how total amount of fixed cost is affected by changes in cost driver.

b)

To determine

Explain how total amount of fixed cost per unit is affected by changes in cost driver.

c)

To determine

Whether expert’s salary is an indirect cost or direct cost when cost objective is to ascertain the cost per tent.

d)

To determine

Determine the amount of salary of expert allocated to tents in the month of January and February.

Expert Solution & Answer

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Answer 4

Question

Chapter 12, Problem 17P

a)

To determine

Explain how total amount of fixed cost is affected by changes in cost driver.

b)

To determine

Explain how total amount of fixed cost per unit is affected by changes in cost driver.

c)

To determine

Whether expert’s salary is an indirect cost or direct cost when cost objective is to ascertain the cost per tent.

d)

To determine

Determine the amount of salary of expert allocated to tents in the month of January and February.

Expert Solution & Answer

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Answer 5

Chapter 12, Problem 17P

a)

To determine

Explain how total amount of fixed cost is affected by changes in cost driver.

b)

To determine

Explain how total amount of fixed cost per unit is affected by changes in cost driver.

c)

To determine

Whether expert’s salary is an indirect cost or direct cost when cost objective is to ascertain the cost per tent.

d)

To determine

Determine the amount of salary of expert allocated to tents in the month of January and February.

Answer 6

Chapter 12, Problem 17P

a)

To determine

Explain how total amount of fixed cost is affected by changes in cost driver.

Answer 7

Chapter 12, Problem 17P

a)

To determine

Explain how total amount of fixed cost is affected by changes in cost driver.

Answer 8

b)

To determine

Explain how total amount of fixed cost per unit is affected by changes in cost driver.

Answer 9

b)

To determine

Explain how total amount of fixed cost per unit is affected by changes in cost driver.

Answer 10

c)

To determine

Whether expert’s salary is an indirect cost or direct cost when cost objective is to ascertain the cost per tent.

Answer 11

c)

To determine

Whether expert’s salary is an indirect cost or direct cost when cost objective is to ascertain the cost per tent.

Answer 12

d)

To determine

Determine the amount of salary of expert allocated to tents in the month of January and February.

Answer 13

d)

To determine

Determine the amount of salary of expert allocated to tents in the month of January and February.

Answer 14

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Answer 15

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Answer 16

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Answer 17

Ch. 12 - 1.What is a cost object? Identify four different...Ch. 12 - Prob. 2Q Ch. 12 - 3.If the cost object is a manufactured product,...Ch. 12 - Prob. 4Q Ch. 12 - Prob. 5Q Ch. 12 - Prob. 6Q Ch. 12 - Prob. 7Q Ch. 12 - Prob. 8Q Ch. 12 - Prob. 9Q Ch. 12 - 10.Why are some manufacturing costs not directly...

Explain how total amount of fixed cost is affected by changes in cost driver.

Solution Summary: The author explains how fixed cost is affected by changes in cost driver. The cost of inspection is not driven by the number of tents.

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Explain how total amount of fixed cost is affected by changes in cost driver.

Explain how total amount of fixed cost per unit is affected by changes in cost driver.

Whether expert’s salary is an indirect cost or direct cost when cost objective is to ascertain the cost per tent.

Determine the amount of salary of expert allocated to tents in the month of January and February.

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Chapter 12 Solutions