jack works on the production line at an assembly plant. jack receives a base salary plus $1.25 per unit assembled. this is an example of a ______ cost.
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Accounting 203 Exam 1 Flashcards
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Accounting 203 Exam 1
Prime Cost
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Direct Materials + Direct Labor costs
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Conversation Cost
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Direct labor costs and Overhead costs
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1/14 Created by adrian_romero52
Terms in this set (14)
Prime Cost
Direct Materials + Direct Labor costs
Conversation Cost
Direct labor costs and Overhead costs
Direct and indirect materials are known as
raw materials
Consider a service company that provides carpet cleaning and uses straight-line depreciation. Classify the cost of the depreciation on the carpet cleaning machines
Variable Indirect Fixed Direct Fixed Indirect Materials activity
the flow of raw materials.
Production Activity
beginning goods in process inventory, direct materials, direct labor, and overhead.
Unfinished products are considered ending goods in process inventory.
Sales activity
Finished goods beginning inventory
goods manufactured
Costs which are tangible components of the finished product are called
Direct Materials
A company incurred the following costs: Selling and administrative expenses: $45,000; Direct materials: $15,000; Income tax expense: $10,000; Direct labor: $30,000; Factory overhead: $5,000. Total manufacturing costs reported on the schedule of cost of goods manufactured are
50000
Consider a service company that provides carpet cleaning. Classify the cost of the hourly workers who clean carpets for customers.
Direct Variable
Which of the following is the correct statement about fixed costs?
The fixed cost per unit does not change when volume changes.
The fixed cost per unit will decrease when volume increases.
The fixed cost per unit will increase when volume increases.
The fixed cost per unit will decrease when volume decreases.
The fixed cost per unit will decrease when volume increases.
Which of the following is the correct statement about variable costs?
The variable cost per unit will increase when volume increases.
The variable cost per unit does not change when volume changes.
The variable cost per unit will decrease when volume increases.
The variable cost per unit does not change when volume changes.
An emphasis on the changing needs and wants of customers is called customer __
orientation
Jack works on the production line at an assembly plant. Jack receives a base salary plus $1.25 per unit assembled. This is an example of a ______ cost.
variable mixed step-wise fixed mixed
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Verified questions
ACCOUNTING
a. What information is included on each line of the petty cash register? b. Why is the petty cash register not considered a journal?
Verified answer ACCOUNTING
Rita and Rick Redding own and operate a tomato grove. After preparing the following income statement, Rita and Rick are concerned about the loss on the No. 3 tomatoes.
\begin{matrix} \text{RITA AND RICK REDDING Income Statement For Year Ended December 31, 2017}\\ & \text{No. 1} & \text{No. 2} & \text{No. 3} & \text{Combined}\\ \text{Sales (by grade)}\\ \text{No. 1: 500,000 Ibs. @ \$1.80/lb }\ldots\ldots\ldots & \text{\$900,000}\\ \text{No. 2: 400,000 Ibs. @ \$1.25/lb} \ldots\ldots\ldots & \quad & \text{\$500,000}\\ \text{No. 3: 100,000 Ibs. @ \$0.40/lb}\ldots\ldots\ldots & \quad & \quad & \text{\$ 40,000}\\ \text{Total sales}\ldots\ldots\ldots & \quad & \quad & \quad & \text{\$1,440,000}\\ \text{Costs}\\ \text{Land preparation, seeding, and cultivating @ \$0.70/Ib} \ldots\ldots\ldots & \text{350,000} & \text{280,000} & \text{70,000} & \text{700,000}\\ \text{Harvesting, sorting, and grading @ \$0.04/Ib}\ldots\ldots\ldots & \text{20,000} & \text{16,000} & \text{4,000} & \text{40,000}\\ \text{Delivery costs .}\ldots\ldots\ldots & \text{10,000} & \text{7,000} & \text{3,000} & \text{20,000}\\ \text{Total costs . .} \ldots\ldots\ldots & \text{380,000} & \text{303,000} & \text{77,000} & \text{760,000}\\ \text{Net income (loss)} \ldots\ldots\ldots & \text{\$520,000} & \text{\$197,000} & \text{\$(37,000)} & \text{\$ 680,000}\\ \end{matrix}
RITA AND RICK REDDING Income Statement For Year Ended December 31, 2017
Sales (by grade)
No. 1: 500,000 Ibs. @ $1.80/lb ………
No. 2: 400,000 Ibs. @ $1.25/lb………
No. 3: 100,000 Ibs. @ $0.40/lb………
Total sales……… Costs
Land preparation, seeding, and cultivating @ $0.70/Ib………
Harvesting, sorting, and grading @ $0.04/Ib………
Delivery costs .……… Total costs . .………
Net income (loss)………
No. 1 $900,000 350,000 20,000 10,000 380,000 $520,000 No. 2 $500,000 280,000 16,000 7,000 303,000 $197,000 No. 3 $ 40,000 70,000 4,000 3,000 77,000 $(37,000) Combined $1,440,000 700,000 40,000 20,000
Jack works on the production line at an assembly plant. Jack receives a base salary plus $1.25 per unit assembled. This is an ex
Answer:The correct word for the blank space is: mixed. Explanation:Mixed costs or semi-variable costs are the results of adding fixed costs (those th
KonstantinChe [14] 1 year ago 5
Jack works on the production line at an assembly plant. Jack receives a base salary plus $1.25 per unit assembled. This is an ex
ample of a ______ cost.
Business 1 answer:
Vanyuwa [196]1 year ago
7 0
Answer:The correct word for the blank space is: mixed.
Explanation:Mixed costs or semi-variable costs are the results of adding fixed costs (those that do not change) to a variable cost (vary in proportion to the level of activity). Different levels of production in a company determine how much the mixed cost will be.Thus, in Jack's case, his salary is the fixed costs and the $1.25 per unit assembled is the variable cost.You might be interested in
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Kromer Company receives cash immediately from its credit card sales. The credit card company charges 3% of card sales as its fee
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Explanation:When assets increase, you should record a debit. When liabilities increase, you should record a credit.
Since cash is a current asset, then you should record a debit for $9,700.$9,700 is the difference between the sales ($10,000) and the amount the credit card company charges ($300).
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How can the amount of us currency in circulation be so much higher than the amount held by the u.s?
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Estimated Income Statements, using Absorption and Variable Costing
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Answer:Marshall Inc.
1. Estimated Income Statement for the year ending October 31 (Absorption Costing)
Sales volume 40,000 Units 50,000 Units
Sales Revenue $2,120,000 $2,650,000
Cost of goods sold:
Direct materials ($31.90 per unit) 1,276,000 1,595,000
Direct labor ($7.60 per unit) 304,000 380,000
Variable factory overhead ($3.50 per unit) 140,000 175,000
Fixed factory overhead 63,840 63,840
Total cost of goods sold $1,783,840 $2,213,840
Gross profit $336,160 $436,160
Expenses:
Fixed selling & administrative expenses 17,400 17,400
Variable selling & administrative expenses 55,263 69,079
Total selling & administrative expenses $72,663 $86,479
Net income $263,497 $349,681
2. Estimated Income Statement for the year ending October 31 (Variable Costing)
Sales volume 15,200 Units 16,800 Units
Sales Revenue $805,600 $890,400
Cost of goods sold:
Direct materials ($31.90 per unit) 484,880 535,920
Direct labor ($7.60 per unit) 115,520 127,680
Variable factory overhead ($3.50 per unit) 53,200 58,800
Variable selling & administrative expenses 21,000 23,210
Total Variable costs $674,600 $745,610
Gross profit $131,000 $144,790
Fixed Expenses:
Fixed selling & administrative expenses 17,400 17,400
Fixed factory overhead 63,840 63,840
Total fixed expenses $81,240 $81,240
Net income $49,760 $63,550
Explanation:a) Data and Calculations:
Estimated Operating Results
Sales (15,200 x $53) $805,600
Manufacturing costs (15,200 units):
Direct materials 484,880 ($31.90 per unit)
Direct labor 115,520 ($7.60 per unit)
Which of the following is the correct statement about variable costs? *The variable cost per unit does not change when volume changes. *The variable cost per unit will decrease when volume increases *The variable cost per unit will increase when volume in. The variable cost per unit does not change when volume changes. Variable costs per unit will remain the same. Variable costs in total will increase with volume increases..
Study Sets for Managerial Accounting CH 18. Which of the following is the correct statement about variable costs? *The variable cost per unit does not change when volume changes. *The variable cost per unit will decrease when volume increases *The variable cost per unit will increase when volume in. The variable cost per unit does not change when volume changes. Variable costs per unit will remain the same. Variable costs in total will increase with volume increases..
Managerial Accounting CH 18
Fixed Profits Fixed
*Has A Profit Of $0 *Contribution Margin Equals Fixed Costs
Based On Visual Fit And Subject To Interpertation
*Uses Only Two Sets Of Values *Less Precise Because It Uses The Extreme Points
*Uses A Statistical Technique And All Data Points *Most Precise Method
1. Production Supervisor's Salary 2. Sales Rep's Pay Which Includes Salary Plus Commission 3. Production Line Worker's Pay, Which Is An Hourly Wage
Costs Sales $40,000
$75,000. $10 - 6 = $4/$10 = 40%. $30,000/40% = $75,000.
Contribution Margin Ratio
1. Scatter Diagrams 2. High-Low Method 3. Least-Squares Regression
*Depreciation, $4,500 Per Month *Property Taxes, $12,000 Per Year
*Direct Materials, $25 Per Unit *Shipping Costs, $15 Per Unit
*Water & Sewer, $50 Per Month Plus $0.10 Per Gallon *Sales Rep's Pay, $1,000 Per Month Plus 10% Sales Commission
Sales - Variable Costs = Contribution Margin - Fixed Costs = Net Income
Change In Cost/Change In Units
*Total Loss To The Left Of The Intersection *Total Profit To The Right Of The Intersection
$50,000 ($110,000 - $87,500)/(4000-2500) = $22,500/1500u= $15/Unitl FC = $110,000 - ($15/Unit X 4,000 Units) = $50,000
The Variable Cost Per Unit
$1,200 (800 X $16 Selling Price) - (800 X $12 Variable Costs) - $1,200 Fixed Costs X (1- 40%) = $1,200
The Variable Cost Per Unit Does Not Change When Volume Changes. Variable Costs Per Unit Will Remain The Same. Variable Costs In Total Will Increase With Volume Increases.
*The Amount Sales Can Drop Before The Company Incurs A Loss. *The Difference Between Expected Sales And Break-Even Sales Divided By Expected Sales.
12,500 ($30,000 + $20,000) / ($10 - $6) = 12,500
Mixed
28,000 (2,500 X $36) - $62,000 = $28,000
5,000 $50,000 / ($14 - $4) = 5,000 Units
26,000 ($3,000 + $10,000) / 50% = $26,000
60% ($500,000 - $200,000) / $500,000 = 60%
False
40 ($10 - $6) / $10 = 40% * Per Unit Is "4" *
0.60 VC = $300,000 / 750,000 Units = $0.40/Unit; CM = $1 - $0.40 = $0.60
$0.05 And $0.04 $12,500 / 250,000 And $12,500 / 300,000
*Constant Selling Price Per Unit. *Constant Total Fixed Costs. *Constant Variable Cost Per Unit.
Increase
*Scatter Diagrams *Least-Square Regression *High-Low Method
4 $10 - $6 = $4
64 ($125,000 - $45,000) / $125,000 = 64%
12500 ($30,000 + $20,000) / ($10 - $6) = 12,500 Units
Amount Of Fixed Costs
$81,250 $125,000 X (1 - 35%) = $81,250
$2,000 (800 X $16) - (800 X $12) - $1,200 = $2,000
2:1 5,000/2,500 = 2:1
Increase By 25%
Least-Squares Regression
$25 Variable Normal $314,750 Step-Wise Cost Composite Operating Leverage
2 Contribution Margin = 15,000 X $4 = $60,000; Pre-Tax Income = $60,000 - $30,000; Degree Of Operating Leverage = $60,000 / $30,000 = 2
100 2 X ($100 - $75) + 1 X ($150 - $100) = $100
150 $15,000 / (2 X ($100 - $75) + 1 X ($150 - $100)) = 150 Units
33.34 $25 X 2/3 + $50 X 1/3 = $16.67 + $16.67 = $33.34
Ratio
75000 ($30,000 + $15,000) / ($10 - $4) / $10 = $45,000 / 60% = $75,000
Curvilinear
Guys, does anyone know the answer?