depreciation expense or depreciation cost is fixed cost or variable cost in nature? Fixed costs: Fixed costs are such costs that do not change with the change in activity level within the relevant range. Where relevant range can be defined in terms of time or activity level. Variable costs: Variable costs are such costs that change with the change in activity level . Coming to the question‚ depreciation expense or depreciation cost can either be fixed or variable and this depends on the method adopted
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organization as a whole‚ rather than on the organization’s segments. D. Responses a‚ b‚ and c are all correct. 2. The plans of management are expressed formally in: A. the annual report to shareholders. B. Form 10-Q submitted to the Securities and Exchange Commission. C. performance reports. D. budgets. 3. The costs of direct materials are classified as: A. Choice A B. Choice B C. Choice C D. Choice D 4. The three basic elements of manufacturing cost are direct materials
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Sippican’s cost system‚ should executives abandon overhead assignment to products entirely and adopt a contribution margin approach in which manufacturing overhead is treated as a period expense? Why or why not? 2. Calculate the practical capacity and the capacity cost rates for each of Sippican’s resources: production and setup employees‚ machines‚ receiving and production control employees‚ shipping and packaging employees‚ and engineers. 3. Use these capacity cost rates and the
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requires direct materials costs which total $135 per unit‚ while Alaska’s direct materials requirements total $110 per unit. Direct labor costs per unit are $75 for MaxiFlow and $95 for Alaska. Auerbach Enterprises uses machine hours as the cost driver to assign overhead costs to the air conditioners. The company has used a company-wide predetermined overhead rate in past years‚ but the new controller‚ Bennie Leon‚ is considering the use of departmental overhead rates beginning with the next
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Chapter 10 Managing and Allocating Support-Service Costs ANSWERS TO REVIEW QUESTIONS 10.1 The following factors should be considered when deciding whether to outsource a support service: • cost • quality‚ timeliness‚ and reliability • security of sensitive information • knowledge required 10.2 Some of the costs of cost allocation include: • additional bookkeeping; • additional management costs in selecting allocation methods and allocation
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Health services managers are essentially interested in how costs are affected by changes in volume. Cost behavior refers to a cost ’s reactions to activity level. A cost may rise‚ fall‚ or remain constant as activity levels fluctuate. We can classify several types of costs on the basis of their relationship to the amount of services provided‚ often referred to as activity‚ utilization‚ or volume (Gapenski‚ 2012). When dealing with the future there is a level of uncertainty of volume with regard
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Section B Attempt Any Six Questions (6*5= 30) 1. Company A’s costs are mostly variable‚ whereas Company B’s costs are mostly fixed. When sales increase‚ which company will tend to realize the greatest increase in profits? Explain. 2. Crystal Telecom has budgeted the sales of its innovative mobile phone over the next four months as follows: Sales in Units July. . . . . . . . . . . . . . 30‚000 August . . . . . . . . . . . 45‚000 September . . . . . . . . 60‚000 October . . . .
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Prime cost. | B | Conversion cost. | C | Period cost. | D | Nonmanufacturing cost. | 2. | Prime cost and conversion cost share what common element of total cost? | A | Direct materials. | B | Direct labor. | C | Variable overhead. | D | Variable overhead. | 3. | On the Schedule of Cost of Goods Manufactured‚ the final Cost of Goods Manufactured figure represents: | A | the amount of cost charged to Work in Process during the period. | B | the amount of cost transferred
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Fixed Costs‚ Variable costs‚ and Break Even Point Elizabeth Gaud HSM /260 August 21‚ 2011 Stephanie Koontz Fixed Costs‚ Variable costs‚ and Break Even Point Exercise 10.1 Recompute fixed costs‚ variable costs‚ and the BEP. What are the variable costs? What are the fixed costs? How many meals will the WHDM program need to provide during the fiscal year to reach the BEP? How much profit will the program earn if it completes its 45‚000-meal contract with the City of Westchester? Answer:
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Question 5.1 Explain the difference between fixed costs‚ semi-fixed costs‚ and variable costs. Fixed costs are those which do not change with the level of activity within the relevant range. These costs will incur even if no units are produced. For example rent expense‚ straight-line depreciation expense‚ etc. Fixed costs are those which do not change with the level of activity within the relevant range. These costs will incur even if no units are produced. For example rent expense‚ straight-line
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