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Katarina [22]
2 years ago
13

Barkoff Enterprises, which uses the high-low method to analyze cost behavior, has determined that machine-hours best explain the

company's utilities cost. The company's relevant range of activity varies from a low of 600 machine hours to a high of 1,200 machine-hours, with the following data being available for the first six months of the year:
Month Utilities Machine Hours
January $8,700 800
February $8,360 720
March $8,950 810
April $9,360 920
May $9,625 950
June $9,150 900

Using the high-low method, the utilities cost associated with 1,110 machine hours would be _____.
Business
1 answer:
Paha777 [63]2 years ago
5 0

Answer:

The utilities cost associated with 1,110 machine hours will be $10,505.

Explanation:

High Low method is a way to calculate the variable and fixed cost element of total cost using lowest level of activity and its cost and highest level of activity and its cost.

In this example The Highest activity of Machine hour is in the month of May and Lowest  activity is in February.

Using high low method:

Variable cost =  ( Highest activity cost - Lowest activity cost ) / ( Highest activity - Lowest activity )

Variable cost =  ( Cost in May - Cost in February ) / ( Machine hours in May - Machine Hours in February)

Variable cost =  ( $9,625 - $8,360 ) / ( 950 - 720 )

Variable cost =  $1,265 / 230

Variable cost =  $5.50 per machine hour

Fixed Cost = $8360 - ( 720 x $5.5) = $8360 - $3960 = $4,400

Utility cost of 1110 units = $4,400 + ( 1,110 x 5.5 ) = $4400 + $6,105 = $10,505

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7 0
2 years ago
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A local barnes and noble bookstore ordered 80 marketing books but received 60 books. what percent of the order was missing?
Tatiana [17]

A local barnes and noble bookstore ordered 80 marketing books but received 60 books. what percent of the order was missing?


To solve this question:

Take the 60 books received and divide them by the total 80 books they ordered.

60/80 = 75%


Barnes and Noble received 75% of the books they ordered so they are missing 25% of them.

7 0
3 years ago
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A company currently pays a dividend of $3.4 per share (D0 = $3.4). It is estimated that the company's dividend will grow at a ra
ArbitrLikvidat [17]

Answer:

Current price of stock =$128.06

Explanation:

The Dividend Valuation Model is a technique used to value the worth of an asset. According to this model, the worth of an asset is the sum of the present values of its future cash flows discounted at the required rate of return.

The model is given as

P = D× g/(r-g)

P- price, D- dividend payable in year 1, r -cost of equity, g - growth rate in dividend

Cost of equity

The cost of equity can be calculated using the Capital Asset Model (CAPM).

Ke= Rf +β(Rm-Rf)  

Ke =? , Rf- 6.5%, (Rm-Rf)- 1.5, β- 1.3

Ke=6.5% + 1.3× (1.5)= 8.45%

Stock price

PV of dividend in year 1 = 3.4× 1.17× 1.0845^(-1)=3.668

PV of dividend in year 2 =  3.4× 1.17^2× 1.0845^(-2) = 3.9572

<em>PV of dividend in year 3</em>

This will be done in two(2) steps:

Step 1- PV in year 2 terms

3.4× 1.17^2× 1.05/(0.0845- 0.05)= 141.651

Step 2- PV in year 0

141.6513913× 1.0845^(-2)= 120.4375

Current piece of stock =  3.668  + 3.957  + 120.4375 = 128.062

Current price of stock =$128.062

   

5 0
3 years ago
For financial accounting purposes, what is the total amount of product costs incurred to make 24,500 units
Anna71 [15]

Answer:

The product cost for 24,500 units is $497,350.

Explanation:

The reason is that the the product cost always includes all the variable production cost and specific fixed production cost. In this scenario, direct material cost, direct labor cost, variable manufacturing overhead cost are variable production cost whereas the fixed manufacturing cost is specific fixed production cost which will form part of product cost. The remainder of the cost left is period cost.

Direct materials (24,500 * $7.7 per unit)                               $188,650

Direct labor (24,500 * $4.7 per unit)                                       $115,150

Variable manufacturing overhead (24,500 * $2.2 per unit)  $53,900

Fixed manufacturing overhead (24,500 * $5.7 per unit)      <u>$139,650 </u>

Total product costs                                                                 $497,350

7 0
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denis-greek [22]

Answer:

D) Facilitative

Explanation:

Facilitative style: In management, the term "facilitative decision-making style" is described as one of the different decision making styles that indicates a specific joint effort between subordinates and leaders and they are both are providing an input in order to make a "shared decision". Along with this, they also possess some degree or extent of expertise or/and motivation that is responsible for ensuring an effective decision is being made.

In the question above, the given statement represents a facilitative decision-making style.

4 0
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