Question 2 0 / 1 point Elroy Rocket is entering his senior year as an accounting
ID: 2622253 • Letter: Q
Question
Question 2
0 / 1 point
Elroy Rocket is entering his senior year as an accounting major and has a number of options for his summer break. His options for the 3 month break follow:
(1) Work full time at a local accounting firm making $3,950 per month.
(2) Take a summer class which will cost $800 and work half time making $1,100 per month.
(3) Take a class at a cost of $800 and not work at all during the summer.
Elroy's incremental profit or loss if he chooses option 2 over option 1 would be
Answer:
((3*1100)-800)-(3*{S})
Option 2 = Incremental Revenue (3 * $1,100)
minus Incremental Cost 800
= Incremental Profit $ 2,500
Option 1 = Incremental Revenue (3 * {S})
minus Incremental Cost 800
= Incremental Profit (3 * {S})-800
Option 2 - Option 1 Incremental Profit
Question 3
0 / 1 point
Triton Company's copy department, which does almost all of the photocopying for the sales department and the administrative department, budgets the following costs for the year, based on the expected activity of 5,000,000 copies:
Salaries (fixed)
$88,500
Employee benefits (fixed)
10,000
Depreciation of copy machines (fixed)
10,000
Utilities (fixed)
5,000
Paper (variable, 1 cent per copy)
50,000
Toner (variable, 1 cent per copy)
50,000
The costs are assigned to two cost pools, one for fixed and one for variable costs. The costs are then assigned to the sales department and the administrative department. Fixed costs are assigned on a lump-sum basis, 40 percent to sales and 60 percent to administration. The variable costs are assigned at a rate of 2 cents per copy.
Assuming the following copies were made during the year, 2,868,250 for sales and 2,640,000 for administration, calculate the copy department costs allocated to sales
Answer:
Add Fixed Costs to Total Fixed Costs
Salary + Benefits + Depreciation + Utilities = Total Fixed Costs
Total Fixed Costs * 40%
Variable Costs total copies - administrative copies = sales copies
Sales Copies X .02 = Sales Variable Costs
Sales Fixed Costs + Sales Variable Costs = Copy Department Costs allocated to Sales
Question 4
0 / 1 point
Which organizational officer is directly responsible for managing a company's cash and funds invested in various marketable securities?
Question options:
Controller
Treasurer
CIO
CFO
Question 6
0 / 1 point
Consider the production cost information for Mama Italiano Sauce given below:
Mama Italian Sauce
Production Cost Budget
April 2008
Production - Jars of sauce
20,000
Ingredient cost (variable)
$16,000
Labor cost (variable)
9,000
Rent (fixed)
4,000
Depreciation (fixed)
6,000
Other (fixed)
1,000
Total
$36,000
The company is currently producing and selling 250,000 jars of sauce annually. The jars of sauce sell for $4 per jar. The company is considering lowering the price to $3.70 per jar. Suppose this action will increase sales to 300,000 jars of sauce. What is the incremental costs associated with producing an extra 58,250 jars of sauce?
Answer:
(Variable Ingredient Cost + Variable Labor Cost) / Production Amount in April = incremental cost /jar
incremental cost / jar * extra jars being produced
= incremental costs for producing the additional amounts of sauce jars
Question 2
0 / 1 point
Explanation / Answer
Titan company has a copying department. It copies for sales and administrative department of the company. Since it render services to these two departments, the cost should be charged to sales and administatration department.
A budget has been prepared for Copying department. Two types of costs are there. Some costs are fixed. It does not depend upon the number of copies made. Other costs are variable in nature.
Break up of the costs are shown below-
Statement showing budget of copying department
Variable cost pool:
Paper cost @ 1 cent per copy
Toner cost @ 1 cent per copy
50,000
50,000
Fixed cost:
Employees benefits
Depreciation of copying machine
Utilities
92.250
10,000
10,000
5,000
Note that at 1 cent cost of paper $50,000 budgetted cost will mean total number of copies as per budget is 5,000,000. But actual number of copies are different.
On the basis of this budget copy department is charging 2cents per copy as variable cost to each department. Fixed cost is allocated 40% to sales department and balance to Administrative department. Therefore actual cost charged to a department are as follows-
Statement showing allocation of cost of copying
Remarks: Therefore total cost allocated to sales department is $98,425
Budgeted costs Amount in $Variable cost pool:
Paper cost @ 1 cent per copy
Toner cost @ 1 cent per copy
50,000
50,000
Total of variable cost pool 100,000Fixed cost:
Employees benefits
Depreciation of copying machine
Utilities
92.250
10,000
10,000
5,000
Total of fixed cost pool 117,750 Total cost as per budget 217,750Related Questions
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