15th Edition

ISBN: 9781269768191

Author: Horngren

Publisher: PEARSON C

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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.

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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?

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Chapter 2, Problem 2.20E

Chapter 2, Problem 2.22E

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Chapter 2 Solutions

COST ACCT-W/ACCESS >C< NON-MAJORS

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

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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.

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Chapter 2 Solutions