Fixed versus fixed cost behavior

Assignment Help Managerial Accounting
Reference no: EM1348404

Lovvern Trophies makes and sells trophies to little league ball players. The company normally produces and sells between 8,000 and 14,000 trophies per year. The following cost data apply to various activity levels.

Number of Trophies 8,000 10,000 12,000 14,000
Total Costs incurred
Fixed $42,000
Variable $42,000
Total Costs $84,000
Cost per unit
Fixed $5.25
Variable $5.25
Total cost per trophy $10.50

Required:

a. Complete the proceeding table by filling out the missing amounts for the levels of activity shown in the first row of the table. Round all cost per unit figures to the nearest whole penny.

b. Explain why the total cost per trophy decreases as the number of trophies increases.

Reference no: EM1348404

Questions Cloud

Illustrate what pattern do you see : Now fill in the column for Marginal Cost. Illustrate what pattern do you see
Explain what is workplace stress : Explain what is workplace stress and provide at least one reference you used to describe workplace stress.
Drawing diagram of payroll edi system : Draw diagram of the proposed payroll EDI and EFT system. It is suggested for students to utilize Microsoft Visio to draw the diagram.
What is the mass of the lead : Driving in your car with a constant speed of 12 {rm m}/{rm s}, you encounter a bump in the road that has a circular cross-section. If the radius of curvature of the bump is 35 {rm m}, find out the apparent weight of a 69 person in your car as you ..
Fixed versus fixed cost behavior : Complete the proceeding table by filling out the missing amounts for the levels of activity shown in the first row of the table. Round all cost per unit figures to the nearest whole penny.
Review the logic used to develop brake systems : Analyse the operational characteristics of the current system / component available in the market and future systems yet to come into production. Analyse the effect of the system on the environment and its sustainability.
Is there a difference between good stress and bad stress : Excessive stress is associated with various negative health outcomes, including heart disease and obesity, but some people appear to thrive in stressful environments.
The cost-cutting measures : Based on the cost-cutting measures you identified, state how much money every year you anticipate saving if you implemented every measure.
Illustrate what would their new estimate of the mpc : Now suppose the economists allow for crowding out. Illustrate what would their new estimate of the MPC be larger or smaller than their initial one.

Reviews

Write a Review

Managerial Accounting Questions & Answers

  Job order costing or process costing decision

Your CFO, in her initial work, needs to decide whether to set up a job order costing system or a process type costing system. She has asked you to make a recommendation based on the following information.

  Evaluating proposals with help of cvp analysis

Phonetronix is the small manufacturer of telephone and communications devices. Recently, company management decided to investigate the profitability of cellular phone production. They've three different proposals to evaluate.

  Utilization of managerial accounting in operational planning

Rebecca owns several successful coffeehouses. Each one has its own manger and is operated independently of the others. In what ways do the coffeehouses utilize managerial accounting in the operational planning process?

  Job order costing systems

The law firm of Tilton and Henderson accumulates costs associated with individual cases, using a job order cost system. The following transactions occurred during June:

  Example of cost-volume-profit analysis

Can you give an example of cost-volume-profit analysis using this techniques in your organization or in your past experience?

  Rondell pharmacy-break-even-cost structure

"Breakeven analysis isn't very useful to the company because companies require to do more than break even to survive in the long run." Describe why you agree or disagree with this statement.

  Advise managers whether or not this contract is profitable

Advise managers whether or not this contract is profitable. Evaluate any additional information that managers need to consider before accepting or rejecting this contract

  Cash and investments of a bond sinking fund

Cash and investments of a bond sinking fund established to service general government long-term debt.

  Process costing in united states

Research the history of procedure costing in the United States. When did it begin to be employed in manufacturing companies? What sort of company would employ a process costing system?

  Funding budget shortfalls

Funding budget shortfalls As part of your personal budgeting process, you have determined that in each of the next 5 years you will have budget shortfalls.

  Discussion on product costing

Some firms have a lot of fixed costs and a few variable costs, while other firms are configured the other way around. What effect do you think the existence of a high proportion of fixed costs has on the desirability of using ABC methods?

  Number of pounds of raw materials

Compute the number of units of product to be produced during October. Compute  the number of pounds of raw materials to be purchased during October.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd