Fixed Cost: Fixed cost refers the cost which remains constant for particular time duration and there is no effect over it of the level of production. Variable Cost: Variable cost refers the cost which varies due to the change in the level of production. Higher production level refers higher the variable cost, and lower production level refers lower the variable cost. Relevant Range: Relevant range refers to the level of the activity which represents the maximum and minimum limits of cost driver at various levels of cost. To identify: The current annual relevant range of output.

Question

The Tin company uses the straight-line method to depreciate its equipment. On May 1, 2018, the company purchased some equipment for $200,000. The equipment is estimated to have a useful life of ten years and a salvage value of $20,000. How much depreciation expense should Tin record for the equipment in the adjusting entry on December 31, 2018?

Answer 1

Question

Chapter 2, Problem 2.23E

1.

To determine

Fixed Cost:

Fixed cost refers the cost which remains constant for particular time duration and there is no effect over it of the level of production.

Variable Cost:

Variable cost refers the cost which varies due to the change in the level of production. Higher production level refers higher the variable cost, and lower production level refers lower the variable cost.

Relevant Range:

Relevant range refers to the level of the activity which represents the maximum and minimum limits of cost driver at various levels of cost.

To identify: The current annual relevant range of output.

2.

To determine

To identify: The current annual variable and fixed manufacturing costs within the relevant range.

3.

To determine

To identify: The relevant range of output and total fixed and variable manufacturing cost next year.

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The Tin company uses the straight-line method to depreciate its equipment. On May 1, 2018, the company purchased some equipment for $200,000. The equipment is estimated to have a useful life of ten years and a salvage value of $20,000. How much depreciation expense should Tin record for the equipment in the adjusting entry on December 31, 2018?

Beginning inventory was $4,000, purchases totaled $31,000, and sales were $20,000. What is the ending inventory? Question

Statment of the cost of goods manufactured?

Answer 2

Question

Chapter 2, Problem 2.23E

1.

To determine

Fixed Cost:

Fixed cost refers the cost which remains constant for particular time duration and there is no effect over it of the level of production.

Variable Cost:

Variable cost refers the cost which varies due to the change in the level of production. Higher production level refers higher the variable cost, and lower production level refers lower the variable cost.

Relevant Range:

Relevant range refers to the level of the activity which represents the maximum and minimum limits of cost driver at various levels of cost.

To identify: The current annual relevant range of output.

2.

To determine

To identify: The current annual variable and fixed manufacturing costs within the relevant range.

3.

To determine

To identify: The relevant range of output and total fixed and variable manufacturing cost next year.

Expert Solution & Answer

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Answer 3

Question

Chapter 2, Problem 2.23E

1.

To determine

Fixed Cost:

Fixed cost refers the cost which remains constant for particular time duration and there is no effect over it of the level of production.

Variable Cost:

Variable cost refers the cost which varies due to the change in the level of production. Higher production level refers higher the variable cost, and lower production level refers lower the variable cost.

Relevant Range:

Relevant range refers to the level of the activity which represents the maximum and minimum limits of cost driver at various levels of cost.

To identify: The current annual relevant range of output.

2.

To determine

To identify: The current annual variable and fixed manufacturing costs within the relevant range.

3.

To determine

To identify: The relevant range of output and total fixed and variable manufacturing cost next year.

Expert Solution & Answer

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Answer 4

Question

Chapter 2, Problem 2.23E

1.

To determine

Fixed Cost:

Fixed cost refers the cost which remains constant for particular time duration and there is no effect over it of the level of production.

Variable Cost:

Variable cost refers the cost which varies due to the change in the level of production. Higher production level refers higher the variable cost, and lower production level refers lower the variable cost.

Relevant Range:

Relevant range refers to the level of the activity which represents the maximum and minimum limits of cost driver at various levels of cost.

To identify: The current annual relevant range of output.

2.

To determine

To identify: The current annual variable and fixed manufacturing costs within the relevant range.

3.

To determine

To identify: The relevant range of output and total fixed and variable manufacturing cost next year.

Expert Solution & Answer

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Answer 5

Chapter 2, Problem 2.23E

1.

To determine

Fixed Cost:

Fixed cost refers the cost which remains constant for particular time duration and there is no effect over it of the level of production.

Variable Cost:

Variable cost refers the cost which varies due to the change in the level of production. Higher production level refers higher the variable cost, and lower production level refers lower the variable cost.

Relevant Range:

Relevant range refers to the level of the activity which represents the maximum and minimum limits of cost driver at various levels of cost.

To identify: The current annual relevant range of output.

2.

To determine

To identify: The current annual variable and fixed manufacturing costs within the relevant range.

3.

To determine

To identify: The relevant range of output and total fixed and variable manufacturing cost next year.

Answer 6

Chapter 2, Problem 2.23E

1.

To determine

Fixed Cost:

Fixed cost refers the cost which remains constant for particular time duration and there is no effect over it of the level of production.

Variable Cost:

Variable cost refers the cost which varies due to the change in the level of production. Higher production level refers higher the variable cost, and lower production level refers lower the variable cost.

Relevant Range:

Relevant range refers to the level of the activity which represents the maximum and minimum limits of cost driver at various levels of cost.

To identify: The current annual relevant range of output.

Answer 7

Chapter 2, Problem 2.23E

1.

To determine

Fixed Cost:

Fixed cost refers the cost which remains constant for particular time duration and there is no effect over it of the level of production.

Variable Cost:

Variable cost refers the cost which varies due to the change in the level of production. Higher production level refers higher the variable cost, and lower production level refers lower the variable cost.

Relevant Range:

Relevant range refers to the level of the activity which represents the maximum and minimum limits of cost driver at various levels of cost.

To identify: The current annual relevant range of output.

Answer 8

2.

To determine

To identify: The current annual variable and fixed manufacturing costs within the relevant range.

Answer 9

2.

To determine

To identify: The current annual variable and fixed manufacturing costs within the relevant range.

Answer 10

3.

To determine

To identify: The relevant range of output and total fixed and variable manufacturing cost next year.

Answer 11

3.

To determine

To identify: The relevant range of output and total fixed and variable manufacturing cost next year.

Answer 12

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Answer 23

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...

To identify: The current annual variable and fixed manufacturing costs within the relevant range.

To identify: The relevant range of output and total fixed and variable manufacturing cost next year.

Chapter 2 Solutions