Managerial Accounting: Creating Value in a Dynamic Business Environment
11th Edition
ISBN: 9781259569562
Author: Ronald W Hilton Proffesor Prof, David Platt
Publisher: McGraw-Hill Education
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Textbook Question
Chapter 6, Problem 26E
Jonathan Macintosh is a highly successful Pennsylvania orchardman who hits formed his own company to produce and package applesauce. Apples can be stored for several months in cold storage, so applesauce prediction is relatively uniform throughout the year. The recently hired controller for the firm is about to apply the high low method in estimating the company’s energy cost behavior the following costs were incurred during the past 12 months:
Required:
- 1. Use the high-low method to estimate the company’s energy cost behavior and express it in equation form.
- 2. Predict the energy cost for a month in which 26,000 pints of applesauce are produced.
Refer to the data in the preceding exercise.
Required:
- 1. Draw a scatter diagram and graph the company’s energy cost behavior using the visual-fit method.
- 2. Predict the energy cost for a month in which 26.000 pints of applesauce are produced.
- 3. What peculiarity is apparent from the scalier diagram? What should the cost analyst do?
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10
11
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2,930
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1,465
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variable cost)" to 4 decimal places. Enter the…
Horton Manufacturing Incorporated produces blinds and other window treatments for residential homes and offices. The owner is
concerned about the maintenance costs for the production machinery because maintenance costs for the previous fiscal year were
higher than he expected. The owner has asked you to assist in estimating future maintenance costs to better predict the firm's
profitability. Together, you have determined that the best cost driver for maintenance costs is machine hours. The data from the
previous fiscal year for maintenance costs and machine hours follow:
Month Maintenance Costs Machine Hours
$ 2,695
2,740
2,790
2,890
2,925
3,025
2,935
1
2
3
4
56789012
10
11
2,975
2,850
2,640
2,660
2,960
Maintenance cost
1,620
1,730
1,745
1,795
1,790
1,890
1,810
1,845
1,835
1,480
1,690
1,495
Required:
1. Use the high-low method to estimate the fixed and variable portions for maintenance costs. (In your calculations, round "slope (uni
variable cost)" to 4 decimal places. Enter the "slope…
Chapter 6 Solutions
Managerial Accounting: Creating Value in a Dynamic Business Environment
Ch. 6 - Describe the importance of cost behavior patterns...Ch. 6 - Define the following terms, and explain the...Ch. 6 - Suggest an appropriate activity base (or cost...Ch. 6 - Draw a simple graph of each of the following types...Ch. 6 - Explain the impact of an increase in the level of...Ch. 6 - Explain why a manufacturers cost of supervising...Ch. 6 - Explain the impact of an increase in the level of...Ch. 6 - Prob. 8RQCh. 6 - Indicate which of the following descriptions is...Ch. 6 - Prob. 10RQ
Ch. 6 - What is meant by a learning curve? Explain its...Ch. 6 - Suggest an appropriate independent variable to use...Ch. 6 - What is an outlier? List some possible causes of...Ch. 6 - Explain the cost estimation problem caused by...Ch. 6 - Describe the visual-fit method of cost estimation....Ch. 6 - What is the chief drawback of the high-low method...Ch. 6 - Explain the meaning of the term least squares in...Ch. 6 - Prob. 18RQCh. 6 - Prob. 19RQCh. 6 - List several possible cost drivers that could be...Ch. 6 - Prob. 21RQCh. 6 - Prob. 22ECh. 6 - The behavior of the annual maintenance and repair...Ch. 6 - WMEJ is an independent television station run by a...Ch. 6 - Jonathan Macintosh is a highly successful...Ch. 6 - Jonathan Macintosh is a highly successful...Ch. 6 - The Iowa City Veterinary Laboratory performs a...Ch. 6 - Chillicothe Meat Company produces one of the best...Ch. 6 - Rio Bus Tours has incurred the following bus...Ch. 6 - Prob. 31ECh. 6 - Prob. 32ECh. 6 - Prob. 33ECh. 6 - Gator Beach Marts, a chain of convenience grocery...Ch. 6 - For each of the cost items described below, choose...Ch. 6 - The following selected data were taken from the...Ch. 6 - Antioch Extraction, which mines ore in Montana,...Ch. 6 - Nations Capital Fitness, Inc. operates a chain of...Ch. 6 - The Allegheny School of Music has hired you as a...Ch. 6 - Prob. 40PCh. 6 - (Note: Instructors who wish to cover all three...Ch. 6 - Refer to the original data in the preceding...Ch. 6 - Shortly after being hired as an analyst with...Ch. 6 - The controller of Chittenango Chain Company...Ch. 6 - Dana Rand owns a catering company that prepares...Ch. 6 - Madison County Airport handles several daily...Ch. 6 - Earth and Artistry, Inc. provides commercial...Ch. 6 - Prob. 48CCh. 6 - Refer to the data and accompanying information in...
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