Figure 3-3. Okafor Company manufactures skis. The managementaccountant wants to calculate the fixed and...

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Accounting

Figure 3-3. Okafor Company manufactures skis. The managementaccountant wants to calculate the fixed and variable costsassociated with the leasing of machinery. Data for the past fourmonths were collected. Machine Lease cost hours
Month                  Leasecost              Machine hours
April                      $21,000                   550
May                      $16,500                  420
June                     $19,000                  510
July                       $22,230                 570
1 Refer to Figure 3-3. Using the high-low method calculate thevariable rate for the lease cost
a. $38.18
b. $38.20
c. $61.50
d. $37.25 2.
Refer to Figure 3-3. Using the high-low method calculate thefixed cost of leasing
a. $482
b. $516
c. $420
d. $456
3. Refer to Figure 3-3. What would Okafor Company's cost formulabe to estimate the cost of leasing within the relevant range? a.total lease cost = $456 + ($38.20 × machine hours)
b. total lease cost = $516 + ($38.18 × machine hours)
c. total lease cost = $420 + ($37.25 × machine hours)
d. none of these are correct
4. Refer to Figure 3-3. What would the estimate of OkaforCompany's total lease cost be at a level of 500 machine hours?
a. $19,606
b. $19,556
c. $16,464
d. $18,546
Figure 3-4. Botana Company constructed the following formula formonthly utility cost.
Total utility cost = $1,200 + ($8.10 × labor hours)
Assume that 775 labor hours are budgeted for the month ofApril.
5. Refer to Figure 3-4. Calculate the total variable utilitycost for the month of April.
a. $1,200.00
b. $7,477.50
c. $6,277.50
d. $5,077.50 6.
Refer to Figure 3-4. Calculate the total utility cost for themonth of April.
a. $7,477.50
b. $6,277.50
c. $1,200.00
d. $5,077.50 7.
Refer to Figure 3-4. If Botana Company incurs 9,600 labor hoursfor the year, what would be the estimate of total utility cost?
a. $76,560
b. $78,960
c. $92,160
d. none of these are correct
Figure 3-5. Maxwell Company makes treadmills. The companycontroller wants to calculate the fixed and variable costsassociated with the janitorial costs incurred in the factory. Datafor the past four months were collected.
Month                 JanitoralCost                    Machine hours
September          $11,000                           575
October                 11,400                             610
November             10,200                             510
December             10,725                             550
8. Refer to Figure 3-5. Using the high-low method calculate thefixed cost of the janitorial services
a. $4,080
b. $7,320
c. $6,120
d. none of these are correct
9. Refer to Figure 3-5. What would Maxwell Company's estimate oftotal janitorial cost be at a level of 600 machine hours?
a. $11,280
b. $7,500
c. $4,080
d. $6,120
Figure 3-7. Margola Company produces hand-held calculators. Thecompany controller wanted to calculate the fixed and variable costsassociated with the maintenance cost incurred by the factory. Datafor the past four months were collected.
Month                    MainetnanceCost                    Machine hours
June                      $4,180                                      328
July                        3,956                                        310
August                   4,686                                        386
September             4,240                                        352 ?
Coefficients shown by a regression program are: Intercept 1,150X Variable 1 9.06 10.
Refer to Figure 3-7. Using the results of regression, calculatethe fixed cost of maintenance.
a. $1,150.00
b. $978.37
c. $9.06
d. None of these are correct.

Answer & Explanation Solved by verified expert

4.0 Ratings (576 Votes)

1 Variable cost per unit 2223016500570420 b 382 2 Fixed cost of leasing Total cost 16500 Less variable cost 5730382 16044 14400 Fixed cost 456 4080 d is correct 3 What would Okafor Companys cost formula be to estimate the cost of leasing within See Answer

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In: AccountingFigure 3-3. Okafor Company manufactures skis. The managementaccountant wants to calculate the fixed and variable...Figure 3-3. Okafor Company manufactures skis. The managementaccountant wants to calculate the fixed and variable costsassociated with the leasing of machinery. Data for the past fourmonths were collected. Machine Lease cost hoursMonth Leasecost Machine hoursApril $21,000 550May $16,500 420June $19,000 510July $22,230 5701 Refer to Figure 3-3. Using the high-low method calculate thevariable rate for the lease costa. $38.18b. $38.20c. $61.50d. $37.25 2.Refer to Figure 3-3. Using the high-low method calculate thefixed cost of leasinga. $482b. $516c. $420d. $4563. Refer to Figure 3-3. What would Okafor Company's cost formulabe to estimate the cost of leasing within the relevant range? a.total lease cost = $456 + ($38.20 × machine hours)b. total lease cost = $516 + ($38.18 × machine hours)c. total lease cost = $420 + ($37.25 × machine hours)d. none of these are correct4. Refer to Figure 3-3. What would the estimate of OkaforCompany's total lease cost be at a level of 500 machine hours?a. $19,606b. $19,556c. $16,464d. $18,546Figure 3-4. Botana Company constructed the following formula formonthly utility cost.Total utility cost = $1,200 + ($8.10 × labor hours)Assume that 775 labor hours are budgeted for the month ofApril.5. Refer to Figure 3-4. Calculate the total variable utilitycost for the month of April.a. $1,200.00b. $7,477.50c. $6,277.50d. $5,077.50 6.Refer to Figure 3-4. Calculate the total utility cost for themonth of April.a. $7,477.50b. $6,277.50c. $1,200.00d. $5,077.50 7.Refer to Figure 3-4. If Botana Company incurs 9,600 labor hoursfor the year, what would be the estimate of total utility cost?a. $76,560b. $78,960c. $92,160d. none of these are correctFigure 3-5. Maxwell Company makes treadmills. The companycontroller wants to calculate the fixed and variable costsassociated with the janitorial costs incurred in the factory. Datafor the past four months were collected.Month JanitoralCost Machine hoursSeptember $11,000 575October 11,400 610November 10,200 510December 10,725 5508. Refer to Figure 3-5. Using the high-low method calculate thefixed cost of the janitorial servicesa. $4,080b. $7,320c. $6,120d. none of these are correct9. Refer to Figure 3-5. What would Maxwell Company's estimate oftotal janitorial cost be at a level of 600 machine hours?a. $11,280b. $7,500c. $4,080d. $6,120Figure 3-7. Margola Company produces hand-held calculators. Thecompany controller wanted to calculate the fixed and variable costsassociated with the maintenance cost incurred by the factory. Datafor the past four months were collected.Month MainetnanceCost Machine hoursJune $4,180 328July 3,956 310August 4,686 386September 4,240 352 ?Coefficients shown by a regression program are: Intercept 1,150X Variable 1 9.06 10.Refer to Figure 3-7. Using the results of regression, calculatethe fixed cost of maintenance.a. $1,150.00b. $978.37c. $9.06d. None of these are correct.