Find effect on semi-variable costs for 10% decrease in the current year sales of Incorporation R compared to last year sales.

Question

Want to see more full solutions like this?

Answer 1

Question

Chapter 20, Problem 1STQ

To determine

Find effect on semi-variable costs for 10% decrease in the current year sales of Incorporation R compared to last year sales.

Expert Solution & Answer

Answer to Problem 1STQ

a) Decrease in total, but increase as a percentage of net sales.

Explanation of Solution

Semi-variable costs: These costs are fixed up to certain level of activity; over that level costs will change according to the change in the activity (less proportionate to that activity).

Total semi variable costs will increase/(decrease) along with the increase/(decrease) in the activity due to variable cost element. But semi variable costs percentage will increase less than proportionate to the increase / (decrease) in the activity because of fixed cost element.

For example:

Assume that the last year sales are $100,000 and semi variable cost are $20,000 (50% fixed, that is $10,000 variable component and $10,000 is the fixed component). Percentage of sales for semi-variable costs is 20%($20,000 ÷ $100,000).

During the current year, 10% sales are decreased when compared to the last year. Then, the current year sales are $90,000($100,000 − [$100,000 × 10%]). The semi-variable costs (variable component) are also decreased by 10% due to a decrease in the sales. The current year’s semi variable costs are $19,000 ($9,000 is variable component and $10,000 is the fixed component). The percentage of sales for semi-variable costs is increased from 20% to 21%($19,000 ÷ $90,000).

The above explanation is matching with the option (a) Decrease in total, but increase as a percentage of net sales. Thus, option (a) is the suitable answer. Options (b), (c), and (d) are incorrect answers.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Students have asked these similar questions

Suppose you take out a five-year car loan for $14000, paying an annual interest rate of 4%. You make monthly payments of $258 for this loan. Complete the table below as you pay off the loan. Months Amount still owed 4% Interest on amount still owed (Remember to divide by 12 for monthly interest) Amount of monthly payment that goes toward paying off the loan (after paying interest) 0 14000 1 2 3 + LO 5 6 7 8 9 10 10 11 12 What is the total amount paid in interest over this first year of the loan?

Suppose you take out a five-year car loan for $12000, paying an annual interest rate of 3%. You make monthly payments of $216 for this loan. mocars Getting started (month 0): Here is how the process works. When you buy the car, right at month 0, you owe the full $12000. Applying the 3% interest to this (3% is "3 per $100" or "0.03 per $1"), you would owe 0.03*$12000 = $360 for the year. Since this is a monthly loan, we divide this by 12 to find the interest payment of $30 for the month. You pay $216 for the month, so $30 of your payment goes toward interest (and is never seen again...), and (216-30) = $186 pays down your loan. (Month 1): You just paid down $186 off your loan, so you now owe $11814 for the car. Using a similar process, you would owe 0.03* $11814 = $354.42 for the year, so (dividing by 12), you owe $29.54 in interest for the month. This means that of your $216 monthly payment, $29.54 goes toward interest and $186.46 pays down your loan. The values from above are included…

Suppose you have an investment account that earns an annual 9% interest rate, compounded monthly. It took $500 to open the account, so your opening balance is $500. You choose to make fixed monthly payments of $230 to the account each month. Complete the table below to track your savings growth. Months Amount in account (Principal) 9% Interest gained (Remember to divide by 12 for monthly interest) Monthly Payment 1 2 3 $500 $230 $230 $230 $230 + $230 $230 10 6 $230 $230 8 9 $230 $230 10 $230 11 $230 12 What is the total amount gained in interest over this first year of this investment plan?

Answer 2

Question

Chapter 20, Problem 1STQ

To determine

Find effect on semi-variable costs for 10% decrease in the current year sales of Incorporation R compared to last year sales.

Expert Solution & Answer

Answer to Problem 1STQ

a) Decrease in total, but increase as a percentage of net sales.

Explanation of Solution

Semi-variable costs: These costs are fixed up to certain level of activity; over that level costs will change according to the change in the activity (less proportionate to that activity).

Total semi variable costs will increase/(decrease) along with the increase/(decrease) in the activity due to variable cost element. But semi variable costs percentage will increase less than proportionate to the increase / (decrease) in the activity because of fixed cost element.

For example:

Assume that the last year sales are $100,000 and semi variable cost are $20,000 (50% fixed, that is $10,000 variable component and $10,000 is the fixed component). Percentage of sales for semi-variable costs is 20%($20,000 ÷ $100,000).

During the current year, 10% sales are decreased when compared to the last year. Then, the current year sales are $90,000($100,000 − [$100,000 × 10%]). The semi-variable costs (variable component) are also decreased by 10% due to a decrease in the sales. The current year’s semi variable costs are $19,000 ($9,000 is variable component and $10,000 is the fixed component). The percentage of sales for semi-variable costs is increased from 20% to 21%($19,000 ÷ $90,000).

The above explanation is matching with the option (a) Decrease in total, but increase as a percentage of net sales. Thus, option (a) is the suitable answer. Options (b), (c), and (d) are incorrect answers.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Chapter 20, Problem 1STQ

To determine

Find effect on semi-variable costs for 10% decrease in the current year sales of Incorporation R compared to last year sales.

Expert Solution & Answer

Answer to Problem 1STQ

a) Decrease in total, but increase as a percentage of net sales.

Explanation of Solution

Semi-variable costs: These costs are fixed up to certain level of activity; over that level costs will change according to the change in the activity (less proportionate to that activity).

Total semi variable costs will increase/(decrease) along with the increase/(decrease) in the activity due to variable cost element. But semi variable costs percentage will increase less than proportionate to the increase / (decrease) in the activity because of fixed cost element.

For example:

Assume that the last year sales are $100,000 and semi variable cost are $20,000 (50% fixed, that is $10,000 variable component and $10,000 is the fixed component). Percentage of sales for semi-variable costs is 20%($20,000 ÷ $100,000).

During the current year, 10% sales are decreased when compared to the last year. Then, the current year sales are $90,000($100,000 − [$100,000 × 10%]). The semi-variable costs (variable component) are also decreased by 10% due to a decrease in the sales. The current year’s semi variable costs are $19,000 ($9,000 is variable component and $10,000 is the fixed component). The percentage of sales for semi-variable costs is increased from 20% to 21%($19,000 ÷ $90,000).

The above explanation is matching with the option (a) Decrease in total, but increase as a percentage of net sales. Thus, option (a) is the suitable answer. Options (b), (c), and (d) are incorrect answers.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 20, Problem 1STQ

To determine

Find effect on semi-variable costs for 10% decrease in the current year sales of Incorporation R compared to last year sales.

Expert Solution & Answer

Answer to Problem 1STQ

a) Decrease in total, but increase as a percentage of net sales.

Explanation of Solution

Semi-variable costs: These costs are fixed up to certain level of activity; over that level costs will change according to the change in the activity (less proportionate to that activity).

Total semi variable costs will increase/(decrease) along with the increase/(decrease) in the activity due to variable cost element. But semi variable costs percentage will increase less than proportionate to the increase / (decrease) in the activity because of fixed cost element.

For example:

Assume that the last year sales are $100,000 and semi variable cost are $20,000 (50% fixed, that is $10,000 variable component and $10,000 is the fixed component). Percentage of sales for semi-variable costs is 20%($20,000 ÷ $100,000).

During the current year, 10% sales are decreased when compared to the last year. Then, the current year sales are $90,000($100,000 − [$100,000 × 10%]). The semi-variable costs (variable component) are also decreased by 10% due to a decrease in the sales. The current year’s semi variable costs are $19,000 ($9,000 is variable component and $10,000 is the fixed component). The percentage of sales for semi-variable costs is increased from 20% to 21%($19,000 ÷ $90,000).

The above explanation is matching with the option (a) Decrease in total, but increase as a percentage of net sales. Thus, option (a) is the suitable answer. Options (b), (c), and (d) are incorrect answers.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 20, Problem 1STQ

To determine

Find effect on semi-variable costs for 10% decrease in the current year sales of Incorporation R compared to last year sales.

Expert Solution & Answer

Answer to Problem 1STQ

a) Decrease in total, but increase as a percentage of net sales.

Explanation of Solution

Semi-variable costs: These costs are fixed up to certain level of activity; over that level costs will change according to the change in the activity (less proportionate to that activity).

Total semi variable costs will increase/(decrease) along with the increase/(decrease) in the activity due to variable cost element. But semi variable costs percentage will increase less than proportionate to the increase / (decrease) in the activity because of fixed cost element.

For example:

Assume that the last year sales are $100,000 and semi variable cost are $20,000 (50% fixed, that is $10,000 variable component and $10,000 is the fixed component). Percentage of sales for semi-variable costs is 20%($20,000 ÷ $100,000).

During the current year, 10% sales are decreased when compared to the last year. Then, the current year sales are $90,000($100,000 − [$100,000 × 10%]). The semi-variable costs (variable component) are also decreased by 10% due to a decrease in the sales. The current year’s semi variable costs are $19,000 ($9,000 is variable component and $10,000 is the fixed component). The percentage of sales for semi-variable costs is increased from 20% to 21%($19,000 ÷ $90,000).

The above explanation is matching with the option (a) Decrease in total, but increase as a percentage of net sales. Thus, option (a) is the suitable answer. Options (b), (c), and (d) are incorrect answers.

Answer 6

Chapter 20, Problem 1STQ

To determine

Find effect on semi-variable costs for 10% decrease in the current year sales of Incorporation R compared to last year sales.

Expert Solution & Answer

Answer to Problem 1STQ

a) Decrease in total, but increase as a percentage of net sales.

Explanation of Solution

Semi-variable costs: These costs are fixed up to certain level of activity; over that level costs will change according to the change in the activity (less proportionate to that activity).

Total semi variable costs will increase/(decrease) along with the increase/(decrease) in the activity due to variable cost element. But semi variable costs percentage will increase less than proportionate to the increase / (decrease) in the activity because of fixed cost element.

For example:

Assume that the last year sales are $100,000 and semi variable cost are $20,000 (50% fixed, that is $10,000 variable component and $10,000 is the fixed component). Percentage of sales for semi-variable costs is 20%($20,000 ÷ $100,000).

During the current year, 10% sales are decreased when compared to the last year. Then, the current year sales are $90,000($100,000 − [$100,000 × 10%]). The semi-variable costs (variable component) are also decreased by 10% due to a decrease in the sales. The current year’s semi variable costs are $19,000 ($9,000 is variable component and $10,000 is the fixed component). The percentage of sales for semi-variable costs is increased from 20% to 21%($19,000 ÷ $90,000).

The above explanation is matching with the option (a) Decrease in total, but increase as a percentage of net sales. Thus, option (a) is the suitable answer. Options (b), (c), and (d) are incorrect answers.

Answer 7

Chapter 20, Problem 1STQ

To determine

Find effect on semi-variable costs for 10% decrease in the current year sales of Incorporation R compared to last year sales.

Answer 8

Expert Solution & Answer

Answer to Problem 1STQ

a) Decrease in total, but increase as a percentage of net sales.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Explanation of Solution

Semi-variable costs: These costs are fixed up to certain level of activity; over that level costs will change according to the change in the activity (less proportionate to that activity).

Total semi variable costs will increase/(decrease) along with the increase/(decrease) in the activity due to variable cost element. But semi variable costs percentage will increase less than proportionate to the increase / (decrease) in the activity because of fixed cost element.

For example:

Assume that the last year sales are $100,000 and semi variable cost are $20,000 (50% fixed, that is $10,000 variable component and $10,000 is the fixed component). Percentage of sales for semi-variable costs is 20%($20,000 ÷ $100,000).

During the current year, 10% sales are decreased when compared to the last year. Then, the current year sales are $90,000($100,000 − [$100,000 × 10%]). The semi-variable costs (variable component) are also decreased by 10% due to a decrease in the sales. The current year’s semi variable costs are $19,000 ($9,000 is variable component and $10,000 is the fixed component). The percentage of sales for semi-variable costs is increased from 20% to 21%($19,000 ÷ $90,000).

The above explanation is matching with the option (a) Decrease in total, but increase as a percentage of net sales. Thus, option (a) is the suitable answer. Options (b), (c), and (d) are incorrect answers.

Answer 12

Ch. 20 - Prob. 1STQ Ch. 20 - Prob. 2STQ Ch. 20 - Prob. 3STQ Ch. 20 - Prob. 4STQ Ch. 20 - Prob. 5STQ Ch. 20 - Prob. 1DQ Ch. 20 - Prob. 2DQ Ch. 20 - Prob. 3DQ Ch. 20 - Prob. 4DQ Ch. 20 - 5. Define the relevant range of activity.

Find effect on semi-variable costs for 10% decrease in the current year sales of Incorporation R compared to last year sales.

Find effect on semi-variable costs for 10% decrease in the current year sales of Incorporation R compared to last year sales.

Answer to Problem 1STQ

Explanation of Solution

Want to see more full solutions like this?

Chapter 20 Solutions