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Allison looked at her telephone bill with dismay. After leaving her job last year to become a self-employed consultant, her phone charges had grown considerably. She called her current provider and asked how she could obtain a lower rate. The service representative suggested that Allison buy the following phone plan: " Up to 500 minutes of phone calls for a flat fee of $20 per month. No refunds would be provided for usage less than 500 minutes per month. Any minutes over 500 per month would be billed at 10c per minute. No service change fee or cancellation fee would apply.
Required:
Problem 1. What is the cost driver for Allison's telephone costs, assuming that the cost object is her consulting business?
Problem 2. In the proposed service plan, which of the costs are fixed and which are variable? Explain.
Are the accountant's computations correct? If not, compute the correct net present value. Is this capital project acceptable to the company? Why
How is ROI calculated, if only information given is an extract of an income statement, and ending assets figure, without any beginning balances.
Beryl Enterprise is considering closing down its Jamaica. If this location were to discontinue operations, by what amount would Beryl's pre-tax income increase?
15,400 laces and 7,680 process hours were used. if the company applies overhead using standard costing. How much was applied during the month?
Advise tan or whether he should accept the special order. Tan runs a shop called 'all juice station' which produces 3,500 bottles of fresh apple juice
GHI uses ajob-order costing system and applies overhead costs using direct labour hours. What was GHI's predetermined overhead rate (POHR)?
After speaking with a number of banks, Sharon learns she will only be able to invest her funds at 6%. How much does she need now to fund her travels?
The cost of indirect materials in any quarter is 40% variable,What should be budgeted for the cost of indirect materials for the next quarter?
Solve the level of ticket sales for each price, at which the company would be indifferent as between the fixed and percentage fee alternative.
Do you think that the new safeguard that separates diagnosing problems from selling services will prevent a recurrence of past problems? Explain.
Company A is a manufacturer with current sales of $ 6,000,000 and a 60% contribution margin.
Determine free cash flows for Dell in each of the three years reported. Compare that amount with net income each year. What pattern do you detect?
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