Would like to know cost of this assignment, plus there will be quizzes and exams…
Parker Company manufactures and sells a single product.
Required:
1.
A partially completed schedule of the company’s total and per unit costs over a relevant range of 67,000 to 107,000 units produced and sold each year is given below. Complete the schedule of the company’s total and unit costs. (Round the “Cost per unit” to 2 decimal places. Omit the “$” sign in your response.)
Units Produced and Sold
67,000
87,000
107,000
Total costs:
Variable costs
$247,900
$
$
Fixed costs
390,000
Total costs
$637,900
$
$
Cost per unit:
Variable cost
$
$
$
Fixed cost
Total cost per unit
$
$
$
2.
Assume that the company produces and sells 97,000 units during the year at the selling price of $9.18 per unit. Prepare a contribution format income statement for the year.(Input all amounts as positive values except losses which should be indicated by a minus sign. Omit the “$” sign in your response.)
Parker Company
Contribution Format Income Statement
$
$
*****************************
Speedy Parcel Service operates a fleet of delivery trucks in a large metropolitan area. A careful study by the companys cost analyst has determined that if a truck is driven 144,000 miles during a year, the average operating cost is 12.2 cents per mile. If a truck is driven only 96,000 miles during a year, the average operating cost increases to 14.8 cents per mile.
Required:
1.
Using the high-low method, estimate the variable and fixed cost elements of the annual cost of truck operation. (Round the “Variable cost per mile” to 3 decimal places and the “Fixed cost” to the nearest dollar amount. Omit the “$” sign in your response.)
Variable cost
$
per mile
Fixed cost
$
per year
2.
Express the variable and fixed costs in the form Y = a + bX. (Round the “Variable cost per mile” to 3 decimal places and the “Fixed cost” to the nearest dollar amount. Omit the “$” sign in your response.)
Y =
$
+
$
X
3.
If a truck were driven 120,000 miles during a year, what total cost would you expect to be incurred? (Round the “Variable cost per mile” to 3 decimal places. Round your intermediate and final answers to the nearest dollar amount. Omit the “$” sign in your response.)
Total annual cost
$
****************************************
Frankel Ltd., a British merchandising company, is the exclusive distributor of a product that is gaining rapid market acceptance. The companys revenues and expenses (in British pounds) for the last three months are given below:
Frankel Ltd.
Comparative Income Statements
For the Three Months Ended June 30
April
May
June
Sales in units
1,600
3,500
5,250
Sales revenue
£ 276,800
£ 605,500
£ 908,250
Cost of goods sold
105,600
231,000
346,500
Gross margin
171,200
374,500
561,750
Selling and administrative expenses:
Shipping expense
41,800
68,400
92,900
Advertising expense
70,900
70,900
70,900
Salaries and commissions
98,700
174,700
244,700
Insurance expense
8,100
8,100
8,100
Depreciation expense
42,300
42,300
42,300
Total selling and administrative expenses
261,800
364,400
458,900
Net operating income (loss)
£ (90,600)
£ 10,100
£ 102,850
(Note: Frankel Ltd.s income statement has been recast in the functional format common in the United States. The British currency is the pound, denoted by £.)
Required:
1.
Identify each of the companys expenses (including cost of goods sold) as either variable, fixed, or mixed.
Expenses
Classification
Cost of goods sold
Shipping expense
Advertising expense
Salaries and commissions
Insurance expense
Depreciation expense
2.
Using the high-low method, separate each mixed expense into variable and fixed elements. State the cost formula for each mixed expense.(Omit the “£” sign in your response.)
Variable Cost
Fixed Cost
Formula
£
per unit
£
Y = £
+
£ X
£
per unit
£
Y = £
+
£ X
3.
Redo the companys income statement at the 5,250-unit level of activity using the contribution format. (Input all amounts as positive values except losses which should be indicated by a minus sign. Omit the “£” sign in your response.)
Frankel Ltd.
Income Statement
For the Month Ended June 30
£
Variable expenses:
£
Contribution margin
Fixed expenses:
£
***********************************
Alden Company has decided to use a contribution format income statement for internal planning purposes. The company has analyzed its expenses and has developed the following cost formulas:
Cost
Cost Formula
Cost of goods sold
$34 per unit sold
Advertising expense
$190,000 per quarter
Sales commissions
7% of sales
Administrative salaries
$100,000 per quarter
Shipping expense
?
Depreciation expense
$70,000 per quarter
Management has concluded that shipping expense is a mixed cost, containing both variable and fixed cost elements. Units sold and the related shipping expense over the last eight quarters are given below:
Quarter
Units Sold
Shipping
Expense
Year 1:
First
36,000
$180,000
Second
38,000
$195,000
Third
43,000
$237,000
Fourth
39,000
$200,000
Year 2:
First
37,000
$190,000
Second
40,000
$205,000
Third
54,000
$252,000
Fourth
51,000
$228,000