cost Aecounting ACCT2014 Spring Term 201 st: Test 3 This 5pts 12 of 13 (0 comple

Question

cost Aecounting ACCT2014 Spring Term 201 st: Test 3 This 5pts 12 of 13 (0 complese) his Test an eguation to estimate some of ther monnly aperatig costs for the operating budget for 2018 The tokowing cost and cther dats were gatherod for 2017 Reqarements Requirement 1. Which of the praceding costs is varisbie? Fised? Misxed? Explain Cont function 1. Which of the preceding costs is vatathe? Fixed? Med? Explom 2. Using the high-ow method determine the cast funcbon for each cost s. Comtine the precedáng inormation to get a montbly operating ecat funcion for Explanstion Cost Maantenancsa Haalth insurance Shipping coss the Smith Corporation 4 Neot morth, Smth expects to use 380 machine hours, have 140 empoyses and ship 9.500 unts Estimate the total oparatng cost for the morth Requiement 2. Using the high-ow method, dulemine the cosat function for each cost Bagit by selocing the general formula t Maintenanca Heath insurance Sheping costs L rnt Done has represents the Iinsar cost function for each cost hoose from any ist or enter arry number in the imput nelds and then contnue to the next quession

Explanation / Answer

27094/7130

=$ 3.80 per unit shipped

2) Maintenance cost (variable) =change in cost /change in level of activity

Highest activity : 5222   520

Lowest activity: 4361     110

variable cost per MH : [5222-4361]/[520-110]

          = 861/410

        = $ 2.1 PER MH

Fixed cost at highest activity: 5222-[520*2.1] =4130

b)Health Insurance : 8590    112

Lowest activity : 8590             64

c)SHipping:highest activity   36822 9690        [36822/9690 = $ 3.8]

Lowest activity   24434       6430                         [24434/6430 = $ 3.8]

3)

Z (Total cost) = 2.1 X + 3.8 Y + [4130+8590]

           =2.1X +3.8 Y+ 12720

Where X=number of machine hours

Y=unit shipped

4)Total cost : [2.1*380]+[3.8*9500]+12720

           = 798+ 36100+ 12720

        = 49618

Nature Variable Fixed Maintenance cost Mixed $ 2.1 per MH 4130 Health Insurance Fixed Remain constant in total irrespective of change in activity 8590 Shipping cost Variable Remain constant in per unit

27094/7130

=$ 3.80 per unit shipped

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