Scribd
Upload
6 views

BASTRCSX_Learning-Activity-2_with_answers

The document outlines a strategic cost management exercise for students, focusing on cost behavior analysis through various problems and calculations related to overhead costs and electricity expenses. It includes multiple parts where students compute variable and fixed costs using given data, employing methods like high-low and least squares. The answers are provided for each question, showcasing the expected calculations and results.

Uploaded by

wwaw4280
Copyright
© © All Rights Reserved
Available Formats
Download as RTF, PDF, TXT or read online on Scribd
6 views

BASTRCSX_Learning-Activity-2_with_answers

The document outlines a strategic cost management exercise for students, focusing on cost behavior analysis through various problems and calculations related to overhead costs and electricity expenses. It includes multiple parts where students compute variable and fixed costs using given data, employing methods like high-low and least squares. The answers are provided for each question, showcasing the expected calculations and results.

Uploaded by

wwaw4280
Copyright
© © All Rights Reserved
Available Formats
Download as RTF, PDF, TXT or read online on Scribd
You are on page 1/ 4

STRATEGIC COST MANAGMENT

1st Term., A.Y. 2020 - 2021


BASTRCSX
Module 2 - Cost behavior
Activity 2

NAME: (surname first)________________________________ SCORE: __________________


YR./ SEC.: _________________ DATE: ___________________

GENERAL DIRECTION:
Read and analyze the following questions and type your answer in the space provided for each items.

Part I.
Carlson Company incurred $170,000 in overhead costs making 12,000 units in March. It made
15,000 units and incurred $188,000 in overhead costs in April.

1. Compute the variable component of overhead cost. (Round to the nearest whole number, sample
format: 8)

2. Find the fixed factor of overhead cost. (don’t use money sign, sample format: 11,000)

Part II.
Danner has an average unit cost of $22.50 at a volume of 400,000 units. At 500,000 units the
average unit cost is $20.50.

3. Compute the variable cost per unit. (use two decimal places, sample format: 11.11)

4. Compute the total fixed cost. (don’t use money sign, sample format: 1,000,000)

Part III.
Tri-County Company incurred $175,000 in overhead costs making 40,000 units in April. It made
24,000 units and incurred $147,000 in overhead costs in May.

5. Compute the variable component of overhead cost. (don’t use money sign, sample format: 1.11)

6. Find the fixed factor of overhead cost. (don’t use money sign, sample format: 111,111)

Part IV.
Machine hours and electricity costs for Wells Industries for the year 2011 are as follows:

Month Machine Hours Electricity Costs


January 2,000 $ 9,200
February 2,320 10,500
March 1,520 6,750
April 2,480 11,500
May 3,040 14,125
June 2,640 11,000
July 3,280 12,375
August 2,800 11,375
September 1,600 7,750
October 2,960 13,000
November 3,760 15,500
December 3,360 13,875

7. Using the high-low method, develop an estimate of variable electricity costs per machine hour (use
2 decimal places, sample format: 1.11)

8. Using the high-low method, develop an estimate of fixed electricity costs per month. (use 2 decimal
places, sample format: 111.11)

9. Using the high-low method, develop a cost function for monthly electricity costs. (sample format:
Y=111.11+1.11x)

10. Using the high-low method, estimate electricity costs for a month in which 3,000 machine hours are
worked. (use 2 decimal places, sample format: 11,111.11)

11. Using the least square method, develop an estimate of variable electricity costs per machine hour.
(use 5 decimal places, sample format: 1.11111)

12. Using the least square method, develop an estimate of fixed electricity costs per month. (use two
decimal places, sample format: 1,111.11)
STRATEGIC COST MANAGMENT
Answer Section

PROBLEM

1. ANS:
$6 [($188,000 - $170,000)/(15,000 - 12,000)]

PTS: 1
2. ANS:
$98,000 [$170,000 - (12,000 x $6), or $188,000 - (15,000 x $6)]

PTS: 1
3. ANS:
$12.50 {[($20.50 x 500,000) - ($22.50 x 400,000)]/(500,000 - 400,000)}

PTS: 1
4. ANS:
$4,000,000 ($9,000,000 - $12.50 x 400,000)

PTS: 1
5. ANS:
$1.75 [($175,000 - $147,000)/(40,000 - 24,000)]

PTS: 1
6. ANS:
$105,000 [$147,000 - (24,000 x $1.75), or $175,000 - (40,000 x $1.75)]

PTS: 1
7. ANS:
$3.91 [($15,500 - $6,750)/(3,760 - 1,520)]

PTS: 1
8. ANS:
798.40

PTS: 1
9. ANS:
Y = $798.40 + $3.91X

PTS: 1
10. ANS:
12,528.40

PTS: 1
11. ANS:
3.60796

PTS: 1
12. ANS:
1,863.44

PTS: 1

You might also like