Exercises on Cost Behavior Analysis

No. Answers

TOTAL UNIT COST WOULD EQUAL

44 $4.80

47 6,250 UNITS

49 C. $509,174

86 A. MIXED
87 C. FIXED
88 B. VARIABLE

89 A. $424,655

90 C. $25.92

Exercises on Cost Behavior Analysis

No. Answers

52 D.$6,000 plus $0.75 per unit

B.$3.77 per machine-hour; $15,648 per

57
month
 B.$3.77 per machine-hour; $15,648 per
57
month

119 $1,650 per year plus $0.06 per mile

Exercises on Cost Behavior Analysis

No. Answers

62 C.$310,000

109 D.$282,000

110 C.$264,000
 Exercises on Cost Behavior Analysis and Use A.1
Solution
Variable Cost = (Total Variable Cost / Activity Level) * Unit Produced

variable cost = (35,000 / 10,000) * 16,000

Total Cost = Variable Cost + Fixed Cost

total cost = 56,000 + 20,800
Cost per unit = Total cost / Unit produced
cost per unit = 76,800 / 56,000

Y = $17,500 + $4X
42,500 = 17,500 + 4X
42,500 - 17,500 = 4X
4 4

Variable Cost =(Total Variable Cost / Activity level) * Unit Produced

variable cost = (394,830 / 4,500) * 4,600

total cost = variable cost + fixed cost
total cost = 403,604 + 105,570

Variable Cost =(Total Variable Cost / Activity level) * Unit Produced

variable cost = (416,934 / 5,400) * 5,500

Fixed Cost per unit = Total Fixed Cost / Activity level

fixed cost per unit = 142,560 / 5,500

Exercises on Cost Behavior Analysis and Use A.2

Solution
Variable Cost = Change in Cost / Change in activity
Variable cost = (15,000 - 12,000) / (12,000 - 8,000)
Fixed cost = Total cost - Variable cost
Fixed cost element = 15,000 - (0.75 * 12,000)

Variable Cost =  Change in Machine cost / Change in Machine-Hours

 Variable cost =  (26,860 - 26,532) / (2,974 - 2,887)
Fixed cost = Total cost - Variable cost
Fixed cost = 26,860 - (3.77 * 2,974)

Total cost at high level of activity = (110,000 * 7.5)/100

Total cost at low level of ctivity = (60.000 * 8.75)/100

Variable Cost = Change in Cost / Change in Activity

Variable cost = (8,250 - 5,250) / (110,000 - 60,000)
Fixed cost = Total cost - Variable cost
Fixed cost = 8,250 - (0.06 * 110,000)

Exercises on Cost Behavior Analysis and Use A.3

Solution
Sales
Less: Variable production expense
Variable selling expense
Variable administrative expense
Contribution Margin

Sales
Less: Variable production expense
Variable selling expense
Variable administrative expense
Contribution Margin

Sales
Less: Variable production expense
Fxed production expense
Gross Margin
 56,000

76,800

$ 4.80

6,250

403,604

$ 509,174

$ 424,655

$ 25.92

$ 0.75

$ 6,000
 $ 3.77

$ 15,648

$ 8,250
$ 5,250

$ 0.06

$ 1,650

$ 440,000
able production expense $ 60,000
riable selling expense 21,000
ble administrative expense 49,000 $ 130,000
$ 310,000

$ 460,000
able production expense $ 89,000
riable selling expense 22,000
ble administrative expense 67,000 $ 178,000
$ 282,000

$ 460,000
able production expense $ 89,000
ed production expense 107000 $ 196,000
$ 264,000