MANAGERIAL ACCOUNTING 330

CHAPTER 3 ASSIGNMENT

DAGOHOY, ALVIN

GARCIA, JUDELYN

VIVERO, MELISSA JANE

PROBLEM 3-16

1. High-low method

210,000 - 119,000 / 20,000 - 10,000 = 9.1 or 9 per unit sold

Fixed Cost = Total Cost – Variable Cost

= 210,000 – (9 * 20,000)
= 210,000 – 180,000
Fixed Cost = 30,000

Y = 30,000 + 9X
 2.
Milden Company
Budgeted Income Statement
For the First Quarter, Year 3

Sales (12,000 units × $100 per unit)................................... $1,200,000

Variable expenses:
Cost of goods sold
(12,000 units × $35 unit)............................................. $420,000
Sales commission (6% × $1,200,000)............................. 72,000
Shipping expense
(12,000 units × $9 per unit).........................................  108,000
Total variable expenses.......................................................     600,000
Contribution margin........................................................... 600,000
Fixed expenses:
Advertising expense........................................................ 210,000
Shipping expense............................................................ 30,000
Administrative salaries.................................................... 145,000
Insurance expense........................................................... 9,000
Depreciation expense......................................................   76,000
Total fixed expenses...........................................................     470,000
Net operating income......................................................... $  130,000

PROBLEM 3-17

1. 60,000 units @ 174,000 overhead cost

Utilities (48,000/60,000) = 0.8 per machine hour

 Supervisory salaries = 21,000
174,000 – (60,000*.8) – 21,000 = 105,000 maintenance cost

90,000 units @ 246,000 overhead cost

Utilities (0.8*90,000) = 72,000

Supervisory Salaries = 21,000
Total 93,000

Maintenance cost (246,000 – 93,000) = 153,000

2. High Low Method

153,000 – 105,000 / 90,000 – 60,000 = 1.6

Fixed Cost = 153,000 – (90,000*1.6)

= 153,000 – 144,000

= 9,000

Y = $9,000 + $1.60X

3.

Variable Cost per

Machine-Hour Fixed Cost
Utilities cost................................. $0.80
Supervisory salaries cost............. $21,000
Maintenance cost.........................  1.60    9,000
 Total overhead cost...................... $2.40 $30,000

4. Total overhead cost at an activity level of 75,000 machine-hours:

Fixed costs.......................................................................... $ 30,000

Variable costs: 75,000 MHs × $2.40 per MH.....................  180,000
Total overhead costs........................................................... $210,000

3A-1
Month X Y XY X2
January 2,380 10,825 25,763,500 5,664,400
February 2,421 11,865 28,725,165 5,861,241
March 2,586 11,332 29,304,552 6,687,396
April 2,725 12,422 33,849,950 7,425,625
May 2,968 13,850 41,106,800 8,809,024
June 3,281 14,419 47,308,739 10,764,961
July 3,353 14,935 50,077,055 11,242,609
August 3,489 15,738 54,909,882 12,173,121
September 3,057 13,563 41,462,091 9,345,249
October 2,876 11,889 34,192,764 8,271,376
November 2,735 12,683 34,688,005 7,480,225
December 2,983 13,796 41,153,468 8,898,289
Totals 34,854 157,317 462,541,971 102,623,516

n (∑XY) - (∑X) (∑Y)

b =
n(∑X2) - (∑X)2

12($462,541,971) -(34,854) ($157,317

2
= 12(102,623,516) - (34,854)

$5,550,503,652 - $5,483,126,718
= 1,231,482,192 - 1,214,801,316

$67,376,934
= 16,680,876

b = $4.04

(∑Y) - b(∑X)
a =
n

($157,317) - 4.04(34,854)
= 12
= $157,317 - $140,810
12

a = $1,376.00

Y = $1,376 + $4.04X