MANAGERIAL ACCOUNTING FOR MANAGERS by Noreen Brewer Garrison CHAPTER 2 Internet

Question

MANAGERIAL ACCOUNTING FOR MANAGERS  
by Noreen Brewer Garrison
CHAPTER 2   

Internet Exercise  

The websites of two companies appear below:  

Evian at (http://www.evian.com).

Gulf Craft Inc. (http://www.gulfcraftinc.com).

Review the information about the operations of each company that is provided on the company’s website. Write a brief summary (one paragraph) for each of the two companies that includes a:

A brief description of the operations of the company and

Two specific examples of possible:

Fixed costs,

Variable costs, and  

Mixed costs.  

Explanation / Answer

Answer

Evian Inc.

Evian Inc. sells pure and mineral water in bottle size of 1 liter, 1.5 liter , 750ml, 500ml, 330ml. Evian Inc. also sells Facial Spray to freshen all skin types. It offers facial spray in 4 different sizes 50ml, 150ml, 300ml and 400 ml.

Fixed costs: Salaries to employees, Rent expense, Depreciation of processing machines

Variable costs: Raw material used in Facial Spray, Sales commission

Mixed costs: Electricity bill with fixed line rent, Wages of workers with overtime pay

Gulf craft Inc.

Gulf craft Inc. is manufacturing high quality vessels for more than 30 years with four yards in the Emirates and one in the Maldives. Gulf Craft Inc. exports more than 70 percent of its output of more than 500 vessels a year with an overall length of up to 155 ft.

Fixed costs: Salaries to employees, Rent expense, Depreciation on cranes

Variable costs: Raw material used in building vessels, Sales commission

Mixed costs: Electricity bill with fixed line rent, Wages of workers with overtime pay

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