Question : 191. The cost graphs in the illustration below shows various types : 1233805

 

191. The cost graphs in the illustration below shows various types of cost behaviors.For each of the following costs, identify the cost graph that best describes its cost behavior as the number of units produced and sold increases: 

(a)

Sales commissions of $5,000 plus $.05 for each item sold.

(b)

Rent on warehouse of $10,000 per month.

(c)

Insurance costs of $2,500 per month.

(d)

Per-unit cost of direct labor.

(e)

Total salaries of quality control supervisors. One supervisor must be added for each additional work shift.

(f)

Total employer pension costs of $.30 per direct labor hour.

(g)

Per-unit straight-line depreciation costs.

(h)

Per-unit cost of direct materials.

(i)

Total direct materials cost.

(j)

Electricity costs of $5,000 per month plus $.0004 per kilowatt-hour.

(k)

Per-unit cost of plant superintendent’s salary.

(l)

Per-unit cost of direct labor.

(m)

Repairs and maintenance costs of $3,000 for each 2,000 hours of factory machine usage.

(n)

Total direct labor cost.

(o)

Straight-line depreciation on factory equipment.

 

 

 

192. Barrack Inc. manufactures laser printers within a relevant range of production of 50,000 to 70,000 printers per year. The following partially completed manufacturing cost schedule has been prepared: 

 

Number of Printers Produced

 

70,000

90,000

100,000

Total costs:

 

 

 

  Total variable costs

$350,000

(d)

(j)

  Total fixed costs

  630,000

(e)

(k)

    Total costs

$980,000

(f)

(l)

Cost per unit:

 

 

 

  Variable cost per unit

(a)

(g)

(m)

  Fixed cost per unit

(b)

(h)

(n)

    Total cost per unit

(c)

(i)

(o)

 

 

 

 

Complete the preceding cost schedule, identifying each cost by the appropriate letter (a) through (o). 

193. 

(a)

If Bart Company’s budgeted sales are $800,000, fixed costs are $350,000, and variable costs are $640,000, what is the budgeted contribution margin ratio?

(b)

If the contribution margin ratio is 30% for Gray Company, sales are $900,000, and fixed costs are $180,000, what is the operating profit?

 

 

 

194. For the current year ending April 30, Phillip Company expects fixed costs of $70,000, a unit variable cost of $60, and a unit selling price of $95. 

(a)

Compute the anticipated break-even sales (units).

(b)

Compute the sales (units) required to realize an operating profit of $8,000.

 

 

 

195. For the current year ending January 31, Bell Company expects fixed costs of $178,500 and a unit variable cost of $41.50. For the coming year, a new wage contract will increase the unit variable cost to $45. The selling price of $50 per unit is expected to remain the same. 

(a)

Compute the break-even sales (units) for the current year.

(b)

Compute the anticipated break-even sales (units) for the coming year, assuming the new wage contract is signed.

 

 

 

 

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