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Luden [163]
3 years ago
13

Given the following cost and activity observations for Bounty Company's utilities, use the high-low method to determine Bounty's

variable utilities cost per machine hour. Round your answer to the nearest cent.
Cost Machine Hours
March $3,106 15,176
April 2,668 9,558
May 2,892 11,947
June 3,538 17,899

a. $0.59
b. $0.63
c. $1.25
d. $0.10
Business
1 answer:
Svetlanka [38]3 years ago
8 0

Answer:

Variable cost per unit= $0.10

Explanation:

Giving the following information:

Cost Machine Hours

March $3,106 15,176

April 2,668 9,558

May 2,892 11,947

June 3,538 17,899

<u>To calculate the variable cost under the high-low method, we need to use the following formula:</u>

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

Variable cost per unit= (3,583 - 2,668) / (17,899 - 9,558)

Variable cost per unit= $0.10

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A broad principle that requires identifying the activities of a business with specific time periods such as months, quarters, or
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A broad principle that requires identifying the activities of a business with specific time periods such as months, quarters, or years is the <u>Time period principle.</u>

The time period principle- Financial results and other material business activities should be reported over a consistent time period, such as a month, week, day, etc., in accordance with the time period concept. Depending on the frequency of the chosen time period, the firm must then adhere to a distinct set of regulations for each financial statement in accordance with US Generally Accepted Accounting Principles.

Any company's financial statements can be thought of as a snapshot in time that reveals both the company's history and its current status. That's why it's crucial to disclose to readers the time frame in which the financial statements were generated in accordance with the time period concept.

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3 0
1 year ago
Sims Company, a manufacturer of tablet computers, began operations on January 1, 2019. Its cost and sales information for this y
kakasveta [241]

Answer:

Results are below.

Explanation:

<u>Absorption vs Variable costing method</u>

The absorption costing method includes all costs related to production, both fixed and variable. The unit product cost is calculated using direct material, direct labor, and total unitary manufacturing overhead.

The variable costing method incorporates all variable production costs (direct material, direct labor, and variable overhead).

<u>1) First, we need to calculate the total unitary variable cost:</u>

Unitary production variable cost= 35 + 55 + 40= $130

Selling and administrative costs for the year Variable $ 725,000

Unitary total variable cost= 130 + (725,000 / 80,000)= $139.06

<u>Now, the variable income statement:</u>

Sales= 80,000*350= 28,000,000

Total variable cost= (80,000*139.06)=(11,124,800)

Total contribution margin= 16,875,200

Fixed overhead= (6,600,000)

Fixed Selling and administrative costs = (4,250,000)

Net operating income= 6,025,200

<u>2) First, we need to calculate the unitary production cost:</u>

Unitary production cost= 130 + (6,600,000/110,000)= $190

<u>Now, the absorption costing income statement:</u>

<u />

Sales= 28,000,000

COGS= 80,000*190= (15,200,000)

Gross profit= 12,800,000

Total Selling and administrative costs= (725,000 + 4,250,000)= (4,975,000)

Net operating income= 7,825,000

5 0
3 years ago
Please give the answer to question one
Nataliya [291]

Answer:

A

Explanation:

A is the answer to the question

7 0
2 years ago
Fall Co. paid $500 in freight-out charges to ship $25,000 of inventory on consignment to Rodgers Co. Rodgers printed and mailed
Aloiza [94]

Answer:

$5100

Explanation:

The cost of the inventory in $25000 and the cost of shipping it to the consignee, $500.

The cost of marketing brochures an comissions are recognized as expense and do not affect inventory.  If 80% of the inventory was sold, 20% remains, which will have a carrying value of $25,500 X 20% = $5100

6 0
3 years ago
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