MANAGERIAL ACCOUNTING FOR MANAGERS
MANAGERIAL ACCOUNTING FOR MANAGERS
5th Edition
ISBN: 9781264196456
Author: Noreen
Publisher: MCG
Question
Book Icon
Chapter 2A, Problem 2A.7P

1.

To determine

Introduction:

Variable costs and Fixed costs:

Variable costs are those that increase or decrease with the general volume of work. Some of the examples of variable costs are sales commissions, labor costs, raw material costs etc. Fixed costs are those costs that remain fixed irrespective of the volume of work. Some of the examples of fixed costs are office rent, administrative expenses, depreciation etc.

Mixed costs:

Mixed costs are those costs which consist of both variable and fixed portions in them. Some of the examples of mixed costs are salaries and commissions, shipping expenses, etc.

To classify: The expenses in the income statement of M& B Ltd as either variable fixed or mixed.

2.

To determine

Introduction:

Variable costs and Fixed costs:

Variable costs are those that increase or decrease with the general volume of work. Some of the examples of variable costs are sales commissions, labor costs, raw material costs etc. Fixed costs are those costs that remain fixed irrespective of the volume of work. Some of the examples of fixed costs are office rent, administrative expenses, depreciation etc.

Mixed costs:

Mixed costs are those costs which consist of both variable and fixed portions in them. Some of the examples of mixed costs are salaries and commissions, shipping expenses, etc.

High-low method:

In this method, the highest level of activity and the lowest level of activity is taken and compared to determine the total costs at each level. The high-low method can be expressed as Y = a + bx

Where Y is Total mixed cost

A is the total fixed cost

B is the variable cost

X is the activity level

To separate: Each mixed expense into a variable and fixed elements using the high-low method.

3.

To determine

Introduction:

Income Statement:

A company’s financial statements include income statement, balance sheet and cash flow statement. An income statement shows the revenues, expenses and profit / loss earned over a period of time.

To redo: The M& B Ltd income statement at the 5000 unit activity level using contribution format.

Blurred answer
Students have asked these similar questions
QUESTION 1 Rentokil Limited issued a 10-year bond on January 1 2011. It pays interest on January1. The below amortization schedule and interest schedule reflects this. Its year end isDecember 31. Requirements: a) Indicate whether the bonds were issued at a premium or a discount and explainhow you came to your decision.  b) Compute the stated interest rate and the effective interest rate c) Prepare the journal entries for the following years:I. 2011, 2012 & 2018.
Blueberry Corp. plans to tighten its credit policy. The new policy will decrease the average number of days in collection from 65 to 45, as well as reduce the ratio of credit sales to total revenue from 80% to 70%. The company estimates that projected sales will be 8% less if the proposed new credit policy is implemented. The firm’s short-term interest cost is 8%. Projected sales for the coming year are $32,000,000. Assuming a 360-day year, calculate the dollar impact on accounts receivable of Blueberry Corp. of this proposed change in credit policy.
Crane Company accumulates the following data concerning a mixed cost, using units produced as the activity level. Units Produced Total Cost March 9,970 $20,005 April 8,930 18,154 May 10,500 20,538 June 8,710 17,674 July 9,370 18,604 Using the information from your answer to above part, write the cost equation. (Round per unit produced answer to 2 decimal places (e.g., 2.25).) +A +$ per unit produced × Total cost
Knowledge Booster
Background pattern image
Similar questions
SEE MORE QUESTIONS
Recommended textbooks for you
Text book image
Managerial Accounting
Accounting
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:South-Western College Pub
Text book image
Financial And Managerial Accounting
Accounting
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:Cengage Learning,
Text book image
Survey of Accounting (Accounting I)
Accounting
ISBN:9781305961883
Author:Carl Warren
Publisher:Cengage Learning