# ACCT5060 Homework 2

ACCT5060 Homework 2 in \$25 only

1. Computing Average Unit Costs
The total monthly operating costs of Chili To Go are:

\$8,000+ \$0.30X

where

X = servings of chili

(a) Determine the average cost per serving at each of the following monthly volumes: 100; 1,000; 5,000; and 10,000.

Round answers to one decimal place.

(b) Determine the monthly volume at which the average cost per serving is \$0.70.

Automatic versus Manual Processing
Photo Station Company operates a printing service for customers with digital cameras. The current service, which requires employees to download photos from customer cameras, has monthly operating costs of \$6,000 plus \$0.20 per photo printed. Management is evaluating the desirability of acquiring a machine that will allow customers to download and make prints without employee assistance. If the machine is acquired, the monthly fixed costs will increase to \$10,000 and the variable costs of printing a photo will decline to \$0.04 per photo.

(a) Determine the total costs of printing 20,000 and 50,000 photos per month.

(b) Determine the monthly volume at which the proposed process becomes preferable to the current process.

2. High-Low Cost Estimation
Assume the local DHL delivery service hub has the following information available about fleet miles and operating costs:

 Year Miles Operating Costs 2012 556,000 \$182,000 2013 684,000 214,000

Use the high-low method to develop a cost-estimating equation for total annual operating costs. (Let X = annual fleet miles.)

3. Cost Behavior Analysis in a Restaurant: High-Low Cost Estimation
Assume a Papa John’s restaurant has the following information available regarding costs at representative levels of monthly sales:

 Monthly sales in units 5,000 8,000 10,000 Cost of food sold \$10,000 \$16,000 \$20,000 Wages and fringe benefits 5,150 5,240 5,300 Fees paid delivery help 1,150 1,840 2,300 Rent on building 1,400 1,400 1,400 Depreciation on equipment 800 800 800 Utilities 700 760 800 Supplies (soap, floor wax, etc.) 250 340 400 Administrative costs 1,200 1,200 1,200 Total \$20,650 \$27,580 \$32,200

(a) Identify each cost as being variable, fixed, or mixed.

Cost of food sold

Wages and fringe benefits

Fees paid delivery help

Rent on building

Depreciation on equipment

Utilities

Supplies (soap, floor wax, etc.)

(b) Use the high-low method to develop a schedule identifying the amount of each cost that is fixed per month or variable per unit. Total the amounts under each category to develop an equation for total monthly costs.

Round variable cost answers to two decimal places.

(c) Predict total costs for a monthly sales volume of 9,400 units.

5. Developing an Equation from Average Costs
The America Dog and Cat Hotel is a pet hotel located in Las Vegas. Assume that in March, when dog-days (occupancy) were at an annual low of 400, the average cost per dog-day was \$18. In July, when dog-days were at a capacity level of 4,000, the average cost per dog-day was \$9.

(a) Develop an equation for monthly operating costs. (Let X = dog-days per month)

(b) Determine the average cost per dog-day at an annual volume of 24,000 dog-days.

6. Multiple Cost Drivers
Scottsdale Ltd. manufactures a variety of high-volume and low-volume products to customer demand. Presented is information on 2013 manufacturing overhead and activity cost drivers.

 Level Total Cost Units of Cost Driver Unit \$ 500,000 10,000 machine hours Batch 100,000 500 customer orders Product 200,000 25 products

Product X1 required 2,000 machine hours to fill 10 customer orders for a total of 8,000 units.

(a) Assuming all manufacturing overhead is estimated and predicted on the basis of machine hours, determine the predicted total overhead costs to produce the 8,000 units of product X1.

(b) Assuming manufacturing overhead is estimated and predicted using separate rates for machine hours, customer orders, and products (a multiple-level cost hierarchy), determine the predicted total overhead costs to produce the 8,000 units of product X1.

(c) Calculate the error in predicting manufacturing overhead using machine hours versus using multiple cost drivers. Indicate whether the use of only machine hours results in overpredicting or underpredicting the costs to produce 8,000 units of product X1.

(d) Determine the error in the prediction of X1 batch-level costs resulting from the use of only machine hours. Indicate whether the use of only machine hours results in overpredicting or underpredicting the batch-level costs of product X1.

(e) Determine the error in the prediction of X1 product-level costs resulting from the use of only machine hours. Indicate whether the use of only machine hours results in over predicting or under predicting the product-level costs of product X1.

Price of Answer: Just US\$25 only

Need Assistance…?? email us at [email protected].

If you need any type of help regarding Homework, Assignments, Projects, Case study, Essay writing or any thing else then just email us at [email protected]solvemyquestion.com. We will get back to you ASAP. Do not forget to maintain the time frame you need you work to be done.