accounting-ACT 5140 – Accounting for Decision Makers

QUESTION

ACT 5140 – Accounting
for Decision Makers
HW #4 – Chapter
2

Directions:
Please submit your work in Word or PDF
formats only. You can submit an
Excel file to support calculations, but please “cut and paste” your solutions
into the Word or PDF file. Be sure to show how you did your calculations. Also,
please be sure to include your name at the top of the first page of your file.The
assignment is due by 11:59 PM on November 19. Please run spell check and
proofread your answers. If you have any questions, please e-mail me at .edu”>af878@nova.edu or .felo@gmail.com”>andrew.felo@gmail.com. Good luck!

Question #1
a)
A
company estimates that its total cost to send out invoices, receive payments,
deposit the payments, and update accounting records was $10 per sale in 2014.
In 2014, there were 10,000 sales and fixed costs of $60,000. In 2015, the
company expects total fixed costs and variable costs per unit to be the same as
in 2014. If the company budgets 10,500 sales in 2015, what are the expected
total costs and expected costs per unit for 2015?
b)
Assume
the same facts as in part a, except the company expects 9,500 sales in 2015.
What are the expected total costs and expected costs per unit for 2015?

Question #2
a)
A
company estimates that its total cost to acquire materials, set up machines,
and produce products is $25 per unit produced in 2014. In 2014, there were
50,000 units produced and variable costs per unit produced totaled $15. In
2015, the company expects total fixed costs and variable costs per unit to be
the same as in 2014. If the company budgets to produce 52,000 units in 2015,
what are the expected total costs and expected costs per unit for 2015?
b)
Assume
the same facts as in part a, except the company expects to produce 49,000 units
in 2015. What are the expected total costs and expected costs per unit for
2015?

Question #3
The
Tiger Company collected the following annual information on total net sales and
total operating costs:

Year

Total Net Sales

Total
Operating Costs

2014

$8,200,000

$4,250,000

2015

$8,700,000

$4,450,000

In
2016, total net sales are budgeted to be $9,400,000. Using the high-low method,
prepare an estimate of total operating costs for 2016, assuming total fixed
costs and variable costs as a percentage of total net sales are expected to be
the same in 2016 as in 2014 and 2015.

ANSWER:

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