6. (TCO 9) Mace Company accumulates thefollowing data concerning a mixed cost, using miles as the activitylevel.

Miles Driven

Total Cost

January

10,000

$15,000

February

8,000

13,500

March

9,000

14,400

April

7,500

12,500

Compute the variable and fixed cost elements using the high-lowmethod. (Points : 30)

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1.)Markowis Company accumulates the following data concerning amixed cost, using miles as the activity level.

Miles Driven Total Cost Miles Driven Total Cost

January 7,920 $13,004 March 8,480 $13,324

February 7,500 12,050 April 8,240 13,174

Compute the variable and fixed cost elements using the high-lowmethod. (Round variable costs to 2 decimal places, e.g. 10.50 andthe other answer to 0 decimal places, e.g. 125.)

Variable costs per mile $ ?

Fixed costs $ ?

2.)Briggs Corp. has collected the following data concerning itsmaintenance costs for the past 6 months.

Units Produced Total Cost

July 18,090 $38,132

August 31,960 44,672

September 35,990 48,432

October 22,050 40,822

November 39,960 77,498

December 37,920 74,808

Compute the fixed and variable cost elements using the high-lowmethod. (Round variable cost to 2 decimal places, e.g. 10.50 andthe other answer to 0 decimal places, e.g. 125.)

Variable cost per unit $ ?

Fixed cost $ ?

3.)Astoria Company has a unit selling price of $566, variable costsper unit of $323, and fixed costs of $194,886. Compute thebreak-even point in units using the (a) mathematical equation and(b) contribution margin per unit.

BEP using the Mathematical equation?_______ units

BEP using the Contribution margin per unit?_____ units

pucecheetah178

(TCO 6) Hyde Inc. is comparing several alternative capitalbudgeting projects as shown below.

Projects	A	B	C
Initial Investment	$110,000	$90,000	$50,000
Present value of cash inflows	$100,000	$100,000	$60,000

Using the profitability index, rank the projects, starting with themost attractive. (Points : 5) A, C, B
A, B, C
C, A, B
C, B, A

Question 11. 11. (TCO 6) A company has aminimum required rate of return of 10%. It is considering investingin a project that costs $210,000 and is expected to generate cashinflows of $85,000 at the end of each year for 4 years. Theapproximate net present value of this project is _____.
(Points : 5)

$59,442
$1,387
$65,375
$5,161

Question 12. 12. (TCO 7) Which one of thefollowing is not needed in preparing a production budget? (Points :5)

Budgeted unit sales
Budgeted raw materials
Beginning finished goodsunits
Ending finished goodsunits

Question 13. 13. (TCO 7) A company budgetedunit sales of 102,000 units for January, 2008 and 120,000 units forFebruary, 2008. The company has a policy of having an inventory ofunits on hand at the end of each month equal to 30% of next month'sbudgeted unit sales. If there were 30,600 units of inventory onhand on December 31, 2007, how many units should be produced inJanuary, 2008 in order for the company to meet its goals? (Points :5)

107,400 units
102,000 units
96,600 units
138,000 units

Question 14. 14. (TCO 8) A variance thatresults from expected economic conditions that do not materializeis called what? (Points : 5)

Sales variance
Planning variance
Economic variance
Material variance

Question 15. 15. (TCO 9) A static budget isappropriate for _____.
(Points : 5)

variable overhead costs
direct materials costs
fixed overhead costs
None of the above

Question 16. 16. (TCO 9) If the activity levelincreases 10%, total variable costs will _____.
(Points : 5)

remain the same
increase by more than10%
decrease by less than10%
increase 10%

Question 17. 17. (TCO 9) Using the high-lowmethod, what is the fixed cost for the following information?

Month	Miles	Total Cost
January	80,000	$96,000
February	50,000	$80,000
March	70,000	$94,000
April	90,000	$130,000

(Points : 5)

$17,500
$36,000
$14,000
$50,000

Question 18. 18. (TCO 10) Which of thefollowing statements regarding budget reports is incorrect? (Points: 5)

The cost of budget reportsshould not outweigh the benefits.
Budget reports are used forplanning, control, and information.
Reports prepared for uppermanagement typically have fewer details than reports prepared forlower level managers.
Reports are prepared morefrequently for upper management than for lower level managers.

limehippopotamus483

EXERCISE 2-14 High-Low Method; Predicting Cost [L02-4, LO2-5] The Lakeshore Hotel's guest-days of occupancy and custodial supplies expense over the last seven months were: Guest-Days of Occupancy Custodial Supplies Expense Month March ....... April May June ...... July ........ August September ...... 4,000 6,500 8,000 10,500 12,000 9,000 7,500 $7,500 $8,250 $10,500 $12,000 $13,500 $10,750 $9,750 . . . . . . Guest-days is a measure of the overall activity at the hotel. For example, a guest who stays at the hotel for three days is counted as three guest-days. Required: 1. Using the high-low method, estimate a cost formula for custodial supplies expense. 2. Using the cost formula you derived above, what amount of custodial supplies expense would you expect to be incurred at an occupancy level of 11,000 guest-days? 3. Prepare a scattergraph using the data given above. Plot custodial supplies expense on the ver- tical axis and the number of guest-days occupied on the horizontal axis. Draw a straight line 4. through the two data points that correspond to the high and low levels of activity. Make sure your line intersects the Y-axis. Comment on the accuracy of your high-low estimates assuming a least-squares regression analysis estimated the total fixed costs to be $3,973.10 per month and the variable cost to be $0.77 per guest-day. How would the straight line that you drew in requirement 3 differ from a straight line that minimizes the sum of the squared errors? Using the least-squares regression estimates given in requirement 4, what custodial supplies expense would you expect to be incurred at an occupancy level of 11,000 guest-days? 5. Net operating income. $ 6,000 $ 18,000 $ 30,000 Required: 1. Identify each of the company's expenses (including cost of goods sold) as either variable, fixed, or mixed. 2. Using the high-low method, separate each mixed expense into variable and fixed elements. State the cost formula for each mixed expense. 3. Redo the company's income statement at the 5,000-unit level of activity using the contribution format.

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Homework Help 3,900,000

Accounting 580,000

	Miles Driven	Total Cost
January	10,000	$15,000
February	8,000	13,500
March	9,000	14,400
April	7,500	12,500