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leva [86]
2 years ago
13

Illinois Company is attempting to develop the cost function for repair costs. The following past data are available: Machine Hou

rs Repair Costs 2,400 $6,385 1,200 $3,480 2,000 $5,285 3,400 $8,980 Using the high-low method, what is the Fixed repair cost
Business
1 answer:
Harlamova29_29 [7]2 years ago
7 0

Answer:

$480

Explanation:

Data provided in the question:

Machine              Hours Repair Costs

2,400                       $6,385

1,200                        $3,480

2,000                       $5,285

3,400                       $8,980

Now,

                       Machine              Hours Repair Costs

Highest             3,400                       $8,980

Lowest              1,200                        $3,480

Difference        2,200                       $5,500

Unit variable cost =  $5,500 ÷ 2,200

= $2.5

Total cost at high level = $8,980

Machine hours highest level = 3,400

Also,

Total cost at high level = Fixed cost + Variable cost at highest level

or

$8,980 = Fixed cost + [ $2.5 × 3,400 ]

or

Fixed cost = $8,980 -  [ $2.5 × 3,400 ]

= $8,980 - $8,500

= $480

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Blanchard Company manufactures a single product that sells for $ 180 per unit and whose total variable costs are $ 126 per unit
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Answer:

Part 1

<u>Income Statement at 15,600 units</u>

Sales ($ 180 x 15,600)                                     $2,808,000

Less Variable Costs ($126 x 15,600)             ($1,965,600)

Contribution                                                        $842,400

Less Fixed Costs                                               ($842,400)

Net Income                                                                    $0

Part 2

$3,278,000

Explanation:

Break even (units) = Fixed Cost ÷ Contribution per unit

                               = $ 842,400 ÷ ($ 180 - $126)

                               = 15,600 units

<u>Assume the company's fixed costs increase by $ 141.000</u>

Break even (units) = Fixed Cost ÷ Contribution per unit

                               = ($ 842,400 + $ 141.000) ÷ ($ 180 - $126)

                               = 18,212 units

Break even Revenue = 18,212 x  $ 180 =  $3,278,000

6 0
2 years ago
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It’s employment at will
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Firm A's demand for a product is 15 units per month. Its supplier charges an ordering cost of $5 per order and $10 per unit with
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Answer:

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Explanation:

Annual ordering cost = Annual demand/order quantity × ordering cost per order

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Kindly note that there are 12 months in year.

Annual Ordering cost = 180/28 ×  $5= $32.142

Annual ordering cost=$32.142

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Answer:

The answer is attached;

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George believes that women have difficulty coping with the stress of executive decisions. Sally is promoted into a senior manage
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Answer:

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