BUSINESS COLLEGE

Michael owns a machine shop. In reviewing the shop's utility bills for the past 12 months, he found that the highest bill of $2,400 occurred in August when the machines worked 1,000 machine hours. The lowest utility bill of $2,200 occurred in December when the machines worked 500 machine hours.Requirement:
1. Calculate the variable rate per machine hour and the total fixed utility cost.
2. Show the equation for determining total utility cost for the machine shop.
3. If Matt anticipates using 1, 200 machine hours in January, predict the shop's total utility bill using the equation from Requirement 2.

Answers

Answer 1
Answer:

Answer:

Instructions are below.

Explanation:

Giving the following information:

Highest cost= $2,400 when the machines worked 1,000 machine hours.

Lowest cost= $2,200 when the machines worked 500 machine hours.

To calculate the variable cost per unit and total fixed costs, we need to use the following formulas:

Variable cost per unit= (Highest activity cost - Lowest activity cost)/ (Highest activity units - Lowest activity units)

Variable cost per unit= (2,400 - 2,200) / (1,000 - 500)

Variable cost per unit= $0.4 per hour

Fixed costs= Highest activity cost - (Variable cost per unit * HAU)

Fixed costs= 2,400 - (0.4*1,000)= $2,000

Fixed costs= LAC - (Variable cost per unit* LAU)

Fixed costs= 2,200 - (0.4*500)= $2,000

Total cost= 2,000 + 0.4x

x= machine hour

Finally, the total cost for 1,200 machine hours:

Total cost= 2,000 + 0.4*1,200

Total cost= $2,480

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Attraction Corporation produces specially machined parts. The parts are produced in batches in one continuous manufacturing process. Each part is custom produced and requires special engineering design activity (based on customer specifications). Once the design is completed, the equipment can be set up for batch production. Once the batch is completed, a sample is taken and inspected to see if the parts are within the tolerances allowed. Thus, the manufacturing process has four activities: engineering, setups, machining, and inspecting. In addition, there is a sustaining process with two activities: providing utilities (plantwide) and providing space. Costs have been assigned to each activity using direct tracing and resource drivers: Engineering $1,000,000 Setups 900,000 Machining 2,000,000 Inspection 800,000 Providing space 250,000 Providing utilities 180,000 Activity drivers for each activity have been identified and their practical capacities listed: Machine hours 25,000 Setups 200 Engineering hours 5,000 Inspection hours 2,500 The costs of facility-level activities are assigned using machine hours. What is (are) the product-level activity(ies)? a.engineering b.inspecting c.setups d.All of these choices are correct.

Which country is the biggest consumer of Virginia's services?A.Canada

B. Germany

C. Mexico

D. United Kingdom

Answers

Answer:

A.Canada

Explanation:

Answer:

Answer choice A.canada

The manufacturing overhead budget at Rost Corporation is based on budgeted direct labor-hours. The direct labor budget indicates that 2,800 direct labor-hours will be required in September. The variable overhead rate is $7.00 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $43,120 per month, which includes depreciation of $3,640. All other fixed manufacturing overhead costs represent current cash flows. The September cash disbursements for manufacturing overhead on the manufacturing overhead budget should be:

Answers

Answer:

Total overhead cash disbursement= $59,080

Explanation:

Giving the following information:

Estimated direct labor hours= 2,800

The variable overhead rate is $7.00 per direct labor-hour.

Estimated fixed manufacturing overhead= $43,120 per month

Includes depreciation of $3,640

To calculate the cash disbursement, we need to deduct from the fixed manufacturing overhead the depreciation expense because it is not a cash disbursement.

Variable overhead= 7*2,800= 19,600

Fixed overhead= 43,120-3,640= 39,480

Total overhead cash disbursement= $59,080

An investor can make an investment in a real estate development and receive an expected cash return of $45,000 at the end of six years. Based on a careful study of other investment alternatives, she believes that a 9 percent annual return compounded quarterly is a reasonable return to earn on this investment. How much should she pay for it today?

Answers

Answer:

FV= 45,000

I= 9/4=2.25

N=6*4=24

PMT=0

PV=?

Put these in financial calculator

$26,381 is what she should pay for the investment today.

Explanation:

The owner of an Italian restaurant has just been notified by her landlord that the monthly lease on the building in which the restaurant operates will increase by 20% at the beginning of the year. Her current prices are competitive with nearby restaurants of similar quality. However, she is now considering raising her prices by 20 percent to offset the increase in her monthly rent. Would you recommend that she raise prices?

Answers

Answer:

No

Explanation:

In a competitive market, price should be a function of variable/marginal costs not fixed costs.

Hitzu Co. sold a copier (that costs $4,500) for $9,000 cash with a two-year parts warranty to a customer on August 16 of Year 1. Hitzu expects warranty costs to be 5% of dollar sales. It records warranty expense with an adjusting entry on December 31. On January 5 of Year 2, the copier requires on-site repairs that are completed the same day. The repairs cost $146 for materials taken from the repair parts inventory. These are the only repairs required in Year 2 for this copier. 1. How much warranty expense does the company report for this copier in Year 1?

Answers

Answer:

In year 1 the warranty expense reported is $450 ($9,000 x 5%)

Explanation:

The journal entries would be:

Sales journal entry - August 16 - Year 1

Account                          Debit             Credit

Cash                                $9,000

Cost of goods sold         $4,500

Revenue                                               $9,000

Inventory                                              $4,500

Accrued Warranty Expense - December 31 - Year 1

Account                         Debit               Credit

Warranty Expense        $450

Estimated Warranty

Liability                                                    $450

By the end of Year 1, the company has recognized an accrued expense (an accrued expense is recognized before cash is actually paid out) for $450.

How would the issuance of a mortgage note in exchange for a building be reported on the statement of cash flows? A. Noncash finenctng and Investing actvity
B. Investing actvity
C. Operating activity
D. Financng activity

Answers

Answer:

A. Noncash financing and Investing activity

Explanation:

The Cash Flow Statement records all Cash related transactions and used to determine the movement in the Balance of Cash and Cash Equivalent. When mortgage note is issued in exchange of a building, this is simply an Exchange of Assets without the movement of cash. Non - Cash activities are not shown in the Cash Flow Statement.
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