Cost Accounting, Student Value Edition (15th Edition)

15th Edition

ISBN: 9780133428858

Author: Charles T. Horngren, Srikant M. Datar, Madhav V. Rajan

Publisher: PEARSON

See similar textbooks

Concept explainers

Manufacturing Costs

Manufacturing cost is the total cost of procuring or producing a product. In other words, the manufacturing cost is the cost that an individual or business owner undertakes for the manufacturing of goods.

Videos

Textbook Question

Chapter 2, Problem 2.21E

Variable costs, fixed costs, total costs. Bridget Ashton is getting ready to open a small restaurant. She is on a tight budget and must choose between the following long-distance phone plans:

Plan A: Pay 10 cents per minute of long-distance calling.

Plan B: Pay a fixed monthly fee of $15 for up to 240 long-distance minutes and 8 cents per minute thereafter (if she uses fewer than 240 minutes in any month, she still pays $15 for the month).

Plan C: Pay a fixed monthly fee of $22 for up to 510 long-distance minutes and 5 cents per minute thereafter (if she uses fewer than 510 minutes, she still pays $22 for the month).

1. Draw a graph of the total monthly costs of the three plans for different levels of monthly long-distance calling.

Required

2. Which plan should Ashton choose if she expects to make 100 minutes of long-distance calls? 240 minutes? 540 minutes?

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Chapter 2, Problem 2.20E

Chapter 2, Problem 2.22E

Students have asked these similar questions

KIARA LIMITED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER: ASSETS Property, plant and equipment (cost) Accumulated depreciation Long-term investments Inventory Accounts receivable Company tax paid in advance Bank EQUITY AND LIABILITIES 2024 2023 R R 2 490 000 1 620 000 (630 000) 660 000 1 050 000 1 230 000 30 000 (480 000) 450 000 1 290 000 900 000 0 750 000 660 000 5 580 000 4 440 000 Ordinary share capital 2 700 000 2 000 000 Retained income 1 500 000 1 158 000 Long-term loan from Kip Bank (15%) 900 000 1 000 000 Accounts payable 480 000 228 000 Company tax payable 0 54 000 5 580 000 4 440 000 ADDITIONAL INFORMATION All purchases and sales are on credit. Interim dividends paid during the year amounted to R150 750. Credit terms of 3/10 net 60 days are granted by creditors.

Accounting Question

REQUIRED Study the information given below and answer the following questions. Where discount factors are required use only the four decimals present value tables that appear after the formula sheet or in the module guide. Ignore taxes. 5.1 Calculate the Accounting Rate of Return on average investment of the second alternative (expressed to two decimal places). 5.2 Determine which of the two investment opportunities the company should choose by calculating the Net Present Value of each alternative. Your answer must include the calculation of the present values and NPV. 5.3 Calculate the Internal Rate of Return of the first alterative (expressed to two decimal places). Your answer must include two net present value calculations (using consecutive rates/percentages) and interpolation. INFORMATION The management of Bentall Incorporated is considering two investment opportunities: (5 marks) (9 marks) (6 marks) The first alternative involves the purchase of a new machine for R900 000 which…

Chapter 2 Solutions

Cost Accounting, Student Value Edition (15th Edition)

Ch. 2 - Define cost object and give three examples.Ch. 2 - Define direct costs and indirect costs.Ch. 2 - Prob. 2.3Q Ch. 2 - Name three factors that will affect the...Ch. 2 - Define variable cost and fixed cost. Give an...Ch. 2 - What is a cost driver? Give one example.Ch. 2 - What is the relevant range? What role does the...Ch. 2 - Explain why unit costs must often be interpreted...Ch. 2 - Prob. 2.9Q Ch. 2 - What are three different types of inventory that...

Ch. 2 - Distinguish between inventoriable costs and period...Ch. 2 - Define the following: direct material costs,...Ch. 2 - Describe the overtime-premium and idle-time...Ch. 2 - Define product cost. Describe three different...Ch. 2 - What are three common features of cost accounting...Ch. 2 - Prob. 2.16E Ch. 2 - Prob. 2.17E Ch. 2 - Classification of costs, service sector. Market...Ch. 2 - Classification of costs, merchandising sector....Ch. 2 - Prob. 2.20E Ch. 2 - Variable costs, fixed costs, total costs. Bridget...Ch. 2 - Prob. 2.22E Ch. 2 - Prob. 2.23E Ch. 2 - Prob. 2.24E Ch. 2 - Cost drivers and functions. The representative...Ch. 2 - Prob. 2.26E Ch. 2 - Total and unit cost, decision making. Gayles...Ch. 2 - Prob. 2.28E Ch. 2 - Prob. 2.29P Ch. 2 - Prob. 2.30P Ch. 2 - Prob. 2.31P Ch. 2 - Prob. 2.32P Ch. 2 - Prob. 2.33P Ch. 2 - Prob. 2.34P Ch. 2 - Prob. 2.35P Ch. 2 - Prob. 2.36P Ch. 2 - Prob. 2.37P Ch. 2 - Prob. 2.38P Ch. 2 - Prob. 2.39P Ch. 2 - Prob. 2.40P Ch. 2 - Prob. 2.41P Ch. 2 - Prob. 2.42P

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Solution Summary: The author explains fixed cost, variable cost and total cost. The best plan to make long-distance calls is Plan A, Plan B, and Plan C.

Concept explainers

Videos

Want to see the full answer?

Chapter 2 Solutions