For Frank’s Funky Sounds, straight-line depreciation on the trucks is a Learning Objective 1 a. variable cost. b. fixed cost. c. mixed cost. d. high-lowcost.

Question

Want to see more full solutions like this?

Answer 1

Textbook Question

Chapter 21, Problem 1QC

For Frank’s Funky Sounds, straight-line depreciation on the trucks is a
Learning Objective 1
a. variable cost.
b. fixed cost.
c. mixed cost.
d. high-lowcost.

Expert Solution & Answer

To determine

Straight line Depreciation:

Straight line method is a method of charging depreciation in which the depreciation charge remains fixed over the useful life of the asset. Depreciation on asset is calculated by diving the historical cost of the asset less salvage value (if any) by the useful life of the asset.

To determine:

The nature of cost of straight line depreciation on trucks

Answer to Problem 1QC

Solution:

For Frank’s Funky Sounds, straight-line depreciation on the trucks is a

b. fixed cost

Explanation of Solution

A fixed cost is a cost which remains fixed irrespective of the activities of the business. A straight-line depreciation charge remains fixed over the useful life of the asset. Also, the depreciation charge must be incurred even if the trucks are not used in the operations in the given year hence; the straight-line depreciation is a fixed cost.

A variable cost is a cost which varies with the level of activities of the business. When the production increases, the variable cost increases. An example of variable cost is the Direct material used in production process e.g. clothes in the production of shirt.

A mixed cost means a cost which has components of both fixed cost and variable cost. Some part is fixed and other is variable with the level of activity. An example of mixed cost is the salaries of salesman which consists of partly some fixed salary plus commission on sales volume which varies with the sales volume.

High-low cost is the method of determining the fixed cost and the rate of variable costs which are part of mixed costs. The total costs associated with the highest level of activity and the total costs which lowest level of activity is determined. The fixed cost is assumed to be constant is both the highest level and lowest level. The difference of the costs and the level of activity is determined to arrive at the variable cost for the differential activity. The differential variable cost is divided by the differential activity to determine the per unit variable cost. We can illustrate this by an example. Say, the total electricity cost for 15000 machine hours which is the highest activity level is $ 200000. The electricity cost for 10000 machine hours which is lowest activity level is $ 140000. Hence, the cost increases by $60,000 when the machine hours increase by 5000 machine hours. Hence, the variable cost per machine hour= $12. So, the fixed cost is $20000.

Conclusion

Hence, depreciation on asset using the straight-line method is a fixed cost.

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!

02:52

Students have asked these similar questions

After several profitable years running her business, Ingrid decided to acquire the assets of a small competing business. On May 1 of year 1, Ingrid acquired the competing business for $354,000. Ingrid allocated $59,000 of the purchase price to goodwill. Ingrid's business reports its taxable income on a calendar-year basis. Note: Do not round intermediate calculations. Round your answers to the nearest whole dollar amount. a. How much amortization expense on the goodwill can Ingrid deduct in year 1, year 2, and year 3? Year 1 Deductible Amortization Expense Year 2 Year 3

Chapter 19 Homework 15 0.87 points eBook Saved Exercise 19-20 (Algo) Contribution margin ratio by sales territory LO A1 Help Save & Exit Submit Check my work Big Bikes manufactures and sells mountain bikes in two sales territories, West Coast and East Coast. Information for the year follows. The company sold 550 bikes in each territory. Per unit Sales price Variable cost of goods sold West Coast $ 1,500 East Coast $ 1,440 830 70 830 Variable selling and administrative expenses 160 Ask a. Compute contribution margin (in dollars) for each sales territory. b. Compute contribution margin ratio for each sales territory. Which sales territory has the better contribution margin ratio? Print Complete this question by entering your answers in the tabs below. References Required A Required B Compute contribution margin (in dollars) for each sales territory. Sales Variable expenses Variable cost of goods sold Variable selling and administrative expenses Contribution margin West Coast East Coast…

Answer 2

Textbook Question

Chapter 21, Problem 1QC

For Frank’s Funky Sounds, straight-line depreciation on the trucks is a
Learning Objective 1
a. variable cost.
b. fixed cost.
c. mixed cost.
d. high-lowcost.

Expert Solution & Answer

To determine

Straight line Depreciation:

Straight line method is a method of charging depreciation in which the depreciation charge remains fixed over the useful life of the asset. Depreciation on asset is calculated by diving the historical cost of the asset less salvage value (if any) by the useful life of the asset.

To determine:

The nature of cost of straight line depreciation on trucks

Answer to Problem 1QC

Solution:

For Frank’s Funky Sounds, straight-line depreciation on the trucks is a

b. fixed cost

Explanation of Solution

A fixed cost is a cost which remains fixed irrespective of the activities of the business. A straight-line depreciation charge remains fixed over the useful life of the asset. Also, the depreciation charge must be incurred even if the trucks are not used in the operations in the given year hence; the straight-line depreciation is a fixed cost.

A variable cost is a cost which varies with the level of activities of the business. When the production increases, the variable cost increases. An example of variable cost is the Direct material used in production process e.g. clothes in the production of shirt.

A mixed cost means a cost which has components of both fixed cost and variable cost. Some part is fixed and other is variable with the level of activity. An example of mixed cost is the salaries of salesman which consists of partly some fixed salary plus commission on sales volume which varies with the sales volume.

High-low cost is the method of determining the fixed cost and the rate of variable costs which are part of mixed costs. The total costs associated with the highest level of activity and the total costs which lowest level of activity is determined. The fixed cost is assumed to be constant is both the highest level and lowest level. The difference of the costs and the level of activity is determined to arrive at the variable cost for the differential activity. The differential variable cost is divided by the differential activity to determine the per unit variable cost. We can illustrate this by an example. Say, the total electricity cost for 15000 machine hours which is the highest activity level is $ 200000. The electricity cost for 10000 machine hours which is lowest activity level is $ 140000. Hence, the cost increases by $60,000 when the machine hours increase by 5000 machine hours. Hence, the variable cost per machine hour= $12. So, the fixed cost is $20000.

Conclusion

Hence, depreciation on asset using the straight-line method is a fixed cost.

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!

02:52

Answer 3

Textbook Question

Chapter 21, Problem 1QC

For Frank’s Funky Sounds, straight-line depreciation on the trucks is a
Learning Objective 1
a. variable cost.
b. fixed cost.
c. mixed cost.
d. high-lowcost.

Expert Solution & Answer

To determine

Straight line Depreciation:

Straight line method is a method of charging depreciation in which the depreciation charge remains fixed over the useful life of the asset. Depreciation on asset is calculated by diving the historical cost of the asset less salvage value (if any) by the useful life of the asset.

To determine:

The nature of cost of straight line depreciation on trucks

Answer to Problem 1QC

Solution:

For Frank’s Funky Sounds, straight-line depreciation on the trucks is a

b. fixed cost

Explanation of Solution

A fixed cost is a cost which remains fixed irrespective of the activities of the business. A straight-line depreciation charge remains fixed over the useful life of the asset. Also, the depreciation charge must be incurred even if the trucks are not used in the operations in the given year hence; the straight-line depreciation is a fixed cost.

A variable cost is a cost which varies with the level of activities of the business. When the production increases, the variable cost increases. An example of variable cost is the Direct material used in production process e.g. clothes in the production of shirt.

A mixed cost means a cost which has components of both fixed cost and variable cost. Some part is fixed and other is variable with the level of activity. An example of mixed cost is the salaries of salesman which consists of partly some fixed salary plus commission on sales volume which varies with the sales volume.

High-low cost is the method of determining the fixed cost and the rate of variable costs which are part of mixed costs. The total costs associated with the highest level of activity and the total costs which lowest level of activity is determined. The fixed cost is assumed to be constant is both the highest level and lowest level. The difference of the costs and the level of activity is determined to arrive at the variable cost for the differential activity. The differential variable cost is divided by the differential activity to determine the per unit variable cost. We can illustrate this by an example. Say, the total electricity cost for 15000 machine hours which is the highest activity level is $ 200000. The electricity cost for 10000 machine hours which is lowest activity level is $ 140000. Hence, the cost increases by $60,000 when the machine hours increase by 5000 machine hours. Hence, the variable cost per machine hour= $12. So, the fixed cost is $20000.

Conclusion

Hence, depreciation on asset using the straight-line method is a fixed cost.

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!

02:52

Answer 4

Textbook Question

Chapter 21, Problem 1QC

For Frank’s Funky Sounds, straight-line depreciation on the trucks is a
Learning Objective 1
a. variable cost.
b. fixed cost.
c. mixed cost.
d. high-lowcost.

Expert Solution & Answer

To determine

Straight line Depreciation:

Straight line method is a method of charging depreciation in which the depreciation charge remains fixed over the useful life of the asset. Depreciation on asset is calculated by diving the historical cost of the asset less salvage value (if any) by the useful life of the asset.

To determine:

The nature of cost of straight line depreciation on trucks

Answer to Problem 1QC

Solution:

For Frank’s Funky Sounds, straight-line depreciation on the trucks is a

b. fixed cost

Explanation of Solution

A fixed cost is a cost which remains fixed irrespective of the activities of the business. A straight-line depreciation charge remains fixed over the useful life of the asset. Also, the depreciation charge must be incurred even if the trucks are not used in the operations in the given year hence; the straight-line depreciation is a fixed cost.

A variable cost is a cost which varies with the level of activities of the business. When the production increases, the variable cost increases. An example of variable cost is the Direct material used in production process e.g. clothes in the production of shirt.

A mixed cost means a cost which has components of both fixed cost and variable cost. Some part is fixed and other is variable with the level of activity. An example of mixed cost is the salaries of salesman which consists of partly some fixed salary plus commission on sales volume which varies with the sales volume.

High-low cost is the method of determining the fixed cost and the rate of variable costs which are part of mixed costs. The total costs associated with the highest level of activity and the total costs which lowest level of activity is determined. The fixed cost is assumed to be constant is both the highest level and lowest level. The difference of the costs and the level of activity is determined to arrive at the variable cost for the differential activity. The differential variable cost is divided by the differential activity to determine the per unit variable cost. We can illustrate this by an example. Say, the total electricity cost for 15000 machine hours which is the highest activity level is $ 200000. The electricity cost for 10000 machine hours which is lowest activity level is $ 140000. Hence, the cost increases by $60,000 when the machine hours increase by 5000 machine hours. Hence, the variable cost per machine hour= $12. So, the fixed cost is $20000.

Conclusion

Hence, depreciation on asset using the straight-line method is a fixed cost.

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!

02:52

Answer 5

Textbook Question

Answer 6

Textbook Question

Answer 7

Expert Solution & Answer

To determine

Straight line Depreciation:

Straight line method is a method of charging depreciation in which the depreciation charge remains fixed over the useful life of the asset. Depreciation on asset is calculated by diving the historical cost of the asset less salvage value (if any) by the useful life of the asset.

To determine:

The nature of cost of straight line depreciation on trucks

Answer to Problem 1QC

Solution:

For Frank’s Funky Sounds, straight-line depreciation on the trucks is a

b. fixed cost

Explanation of Solution

A fixed cost is a cost which remains fixed irrespective of the activities of the business. A straight-line depreciation charge remains fixed over the useful life of the asset. Also, the depreciation charge must be incurred even if the trucks are not used in the operations in the given year hence; the straight-line depreciation is a fixed cost.

A variable cost is a cost which varies with the level of activities of the business. When the production increases, the variable cost increases. An example of variable cost is the Direct material used in production process e.g. clothes in the production of shirt.

A mixed cost means a cost which has components of both fixed cost and variable cost. Some part is fixed and other is variable with the level of activity. An example of mixed cost is the salaries of salesman which consists of partly some fixed salary plus commission on sales volume which varies with the sales volume.

High-low cost is the method of determining the fixed cost and the rate of variable costs which are part of mixed costs. The total costs associated with the highest level of activity and the total costs which lowest level of activity is determined. The fixed cost is assumed to be constant is both the highest level and lowest level. The difference of the costs and the level of activity is determined to arrive at the variable cost for the differential activity. The differential variable cost is divided by the differential activity to determine the per unit variable cost. We can illustrate this by an example. Say, the total electricity cost for 15000 machine hours which is the highest activity level is $ 200000. The electricity cost for 10000 machine hours which is lowest activity level is $ 140000. Hence, the cost increases by $60,000 when the machine hours increase by 5000 machine hours. Hence, the variable cost per machine hour= $12. So, the fixed cost is $20000.

Conclusion

Hence, depreciation on asset using the straight-line method is a fixed cost.

Answer 8

Expert Solution & Answer

To determine

Straight line Depreciation:

Straight line method is a method of charging depreciation in which the depreciation charge remains fixed over the useful life of the asset. Depreciation on asset is calculated by diving the historical cost of the asset less salvage value (if any) by the useful life of the asset.

To determine:

The nature of cost of straight line depreciation on trucks

Answer to Problem 1QC

Solution:

For Frank’s Funky Sounds, straight-line depreciation on the trucks is a

b. fixed cost

Explanation of Solution

A fixed cost is a cost which remains fixed irrespective of the activities of the business. A straight-line depreciation charge remains fixed over the useful life of the asset. Also, the depreciation charge must be incurred even if the trucks are not used in the operations in the given year hence; the straight-line depreciation is a fixed cost.

A variable cost is a cost which varies with the level of activities of the business. When the production increases, the variable cost increases. An example of variable cost is the Direct material used in production process e.g. clothes in the production of shirt.

A mixed cost means a cost which has components of both fixed cost and variable cost. Some part is fixed and other is variable with the level of activity. An example of mixed cost is the salaries of salesman which consists of partly some fixed salary plus commission on sales volume which varies with the sales volume.

High-low cost is the method of determining the fixed cost and the rate of variable costs which are part of mixed costs. The total costs associated with the highest level of activity and the total costs which lowest level of activity is determined. The fixed cost is assumed to be constant is both the highest level and lowest level. The difference of the costs and the level of activity is determined to arrive at the variable cost for the differential activity. The differential variable cost is divided by the differential activity to determine the per unit variable cost. We can illustrate this by an example. Say, the total electricity cost for 15000 machine hours which is the highest activity level is $ 200000. The electricity cost for 10000 machine hours which is lowest activity level is $ 140000. Hence, the cost increases by $60,000 when the machine hours increase by 5000 machine hours. Hence, the variable cost per machine hour= $12. So, the fixed cost is $20000.

Conclusion

Hence, depreciation on asset using the straight-line method is a fixed cost.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

To determine

Straight line Depreciation:

Straight line method is a method of charging depreciation in which the depreciation charge remains fixed over the useful life of the asset. Depreciation on asset is calculated by diving the historical cost of the asset less salvage value (if any) by the useful life of the asset.

To determine:

The nature of cost of straight line depreciation on trucks

Answer 12

Answer to Problem 1QC

Solution:

For Frank’s Funky Sounds, straight-line depreciation on the trucks is a

b. fixed cost

Answer 13

Explanation of Solution

A fixed cost is a cost which remains fixed irrespective of the activities of the business. A straight-line depreciation charge remains fixed over the useful life of the asset. Also, the depreciation charge must be incurred even if the trucks are not used in the operations in the given year hence; the straight-line depreciation is a fixed cost.

A variable cost is a cost which varies with the level of activities of the business. When the production increases, the variable cost increases. An example of variable cost is the Direct material used in production process e.g. clothes in the production of shirt.

A mixed cost means a cost which has components of both fixed cost and variable cost. Some part is fixed and other is variable with the level of activity. An example of mixed cost is the salaries of salesman which consists of partly some fixed salary plus commission on sales volume which varies with the sales volume.

High-low cost is the method of determining the fixed cost and the rate of variable costs which are part of mixed costs. The total costs associated with the highest level of activity and the total costs which lowest level of activity is determined. The fixed cost is assumed to be constant is both the highest level and lowest level. The difference of the costs and the level of activity is determined to arrive at the variable cost for the differential activity. The differential variable cost is divided by the differential activity to determine the per unit variable cost. We can illustrate this by an example. Say, the total electricity cost for 15000 machine hours which is the highest activity level is $ 200000. The electricity cost for 10000 machine hours which is lowest activity level is $ 140000. Hence, the cost increases by $60,000 when the machine hours increase by 5000 machine hours. Hence, the variable cost per machine hour= $12. So, the fixed cost is $20000.

Answer 14

Conclusion

Hence, depreciation on asset using the straight-line method is a fixed cost.

Answer 15

Ch. 21 - For Frank’s Funky Sounds, straight-line...Ch. 21 - Prob. 2QC Ch. 21 - Prob. 3QC Ch. 21 - Prob. 4QC Ch. 21 - Prob. 5QC Ch. 21 - On a CVP graph, the total cost line intersects the...Ch. 21 - If a company increases its sales price per unit...Ch. 21 - Prob. 8QC Ch. 21 - Prob. 9QC Ch. 21 - Prob. 10QC

For Frank’s Funky Sounds, straight-line depreciation on the trucks is a Learning Objective 1 a. variable cost. b. fixed cost. c. mixed cost. d. high-lowcost.

Videos

Answer to Problem 1QC

Explanation of Solution

Want to see more full solutions like this?

Chapter 21 Solutions

Additional Business Textbook Solutions