Grawburg Incorporated maintains a call center to take orders, answer questions, and handle complaints. The costs of the call center for a number of recent months are listed below: Call Center Cost Calls Taken April May 7,752 $ 84,042 7,721 $ 83,859 June 7,762 $ 84,105 July 7,761 $ 84,088 August 7,726 $ 83,890 September 7,738 $ 83,946 October 7,783 $ 84,223 November 7,771 $ 84,172 Management believes that the cost of the call center is a mixed cost that depends on the number of calls taken. Required: Estimate the variable cost per call and fixed cost per month using the least-squares regression method. (Round the "Variable cost" to 2 decimal places and the "Fixed cost" to the nearest dollar amount.) Answer is complete but not entirely correct. Variable cost 5.90 per call Fixed cost $ 72,681 per month

Grawburg Incorporated maintains a call center to take orders, answer questions, and handle complaints. The costs of the call center for a number of recent months are listed below: Call Center Cost Calls Taken April May 7,752 $ 84,042 7,721 $ 83,859 June 7,762 $ 84,105 July 7,761 $ 84,088 August 7,726 $ 83,890 September 7,738 $ 83,946 October 7,783 $ 84,223 November 7,771 $ 84,172 Management believes that the cost of the call center is a mixed cost that depends on the number of calls taken. Required: Estimate the variable cost per call and fixed cost per month using the least-squares regression method. (Round the "Variable cost" to 2 decimal places and the "Fixed cost" to the nearest dollar amount.) Answer is complete but not entirely correct. Variable cost 5.90 per call Fixed cost $ 72,681 per month

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter7: Allocating Costs Of Support Departments And Joint Products

Section: Chapter Questions

Problem 30E: A company uses charging rates to allocate service department costs to the using departments. The...

See similar textbooks

Similar questions

A company uses charging rates to allocate service department costs to the using departments. The accountant compiled the following information on one of the service departments: If Department K plans to use 1,350 hours of the service departments service in the coming year, how much of the service departments cost is allocated to Department K? a. 3,375 b. 27,300 c. 26,325 d. 23,950
When a company has post-acquisition expenditures related to Property, Plant, and Equipment it must determine whether the amount should be expensed as an ordinary repair or capitalized as a major repair, addition, or betterment. This requires considering the nature of the expenditure and the use of judgment. Many companies use a threshold amount. Any expenditure below the threshold is expensed. Items over the threshold are examined and a decision is made about whether to expense or capitalize the item. This approach is justified by both materiality and considering costs and benefits. For example, a company with $94 million in net property, plant, and equipment and $250 million of operating expenses would not consider a $100 repair as material. Plus, if the company had to spend thousands of dollars examining every repair expenditure, the costs of doing the analysis could easily outweigh the benefits. SouthEast Equipment has a large number of machines and equipment that are available for…
The following represents the financial information for Plaza Plastics for May and June: Sales revenue Costs Scrap Process inspection Quality training Product testing equipment Field testing Warranty repairs Rework Preventive maintenance Legal expense for warranty claims. Materials inspection Required A May $ 843,000 Required B Scrap $ 2,160 3,040 23,940 5,340 8,580 3,540 19,940 16,380 7,980 11,460 Required: a. Classify these items into Prevention, Appraisal, Internal failure, or External failure costs. b. Calculate the ratio of the prevention, appraisal, internal failure, and external failure costs to sales for May and June. Activity Complete this question by entering your answers in the tabs below. June $ 636,000 $ 1,870 1,920 11,880 4,500 6,480 3,240 16,830 8,730 4,500 11,340 Classify these items into Prevention, Appraisal, Internal failure, or External failure costs. Category
Market Makers Incorporated (MMI) provides a range of services to its retail clients-customer service for inquiries, order taking, credit checking for new customers, and a variety of related services. Auto Supermarket (AS) is a large auto dealer that provides financing for the autos and trucks that it sells. AS has approached MMI to manage the inquiries that come in regarding these loans. AS is not satisfied with the performance of the call center it currently uses for handling inquiries on these loans and is considering a change to MMI. MMI has been asked to estimate the cost of providing the service for the coming year. There are two types of loans at AS, one for autos and SUVS and another for light trucks. The loans for auto and truck buyers typically have different types of customers and loan terms, so the nature and volume of the inquiries are expected to differ. MMI would use its own call center to handle the AS engagement. The MMI call center's annual costs are as follows: Call…
Ohio Logistics manages the logistical activities for firms by matching companies that need products shipped with carriers that can provide the best rates and best service for the companies. Ohio Logistics is very concerned that its carriers deliver their customers material on time, so it carefully monitors the percentage of on-time deliveries. The following table contains a list of the carriers used by Ohio Logistics and the corresponding on-time percentages for the current and previous years. a. Sort the carriers in descending order by their current years percentage of on-time deliveries. Which carrier is providing the best service in the current year? Which carrier is providing the worst service in the current year? b. Calculate the change in percentage of on-time deliveries from the previous to the current year for each carrier. Use Excels conditional formatting to highlight the carriers whose on-time percentage decreased from the previous year to the current year. c. Use Excels conditional formatting tool to create data bars for the change in percentage of on-time deliveries from the previous year to the current year for each carrier calculated in part b. d. Which carriers should Ohio Logistics try to use in the future? Why?
Harmon Recycling Services (HRS), a not-for-profit organization, has two drop-off centers, Westside and Eastside. Data for the expected operation in the next quarter follow. Clients Revenues Staff hours Eastside 25,000 $ 510,000 8,100 Staff costs $ 99,000 Westside 6,250 $ 340,000 2,700 $ 153,000 General operating costs Total 31,250 $ 850,000 10,800 $ 252,000 $ 510,000 Required: a. Compute the predetermined overhead rate used to apply general operating costs to the two centers assuming HRS uses the number of clients to allocate general operating costs. b. Based on the rates computed in requirement (a), what is the expected surplus (revenues less costs) for each center? Complete this question by entering your answers in the tabs below. Required A Required B Based on the rates computed in requirement (a), what is the expected surplus (revenues less costs) for each center? Center Surplus Eastside Westside
QuikCard processes credit card receipts for local banks. QuikCard processed 1,300,000 receipts in October. All receipts are processed the same day they are received. October costs were labor of $14,000 and overhead of $25,000. What is the cost to process 1,800 receipts? Multiple Choice $54.00 O $19.38 $38.77 O $21.67
Lackawanna Community College has three divisions: Liberal Arts, Sciences, and Business Administration. The college’s comptroller is trying to decide how to allocate the costs of the Admissions Department, the Registrar’s Department, and the Computer Services Department. The comptroller hascompiled the following data for the year just ended. Department Annual CostAdmissions ................................................................................................... $ 90,000Registrar ............................................................................................................ 150,000Computer Services ......................................................................................... 320,000 Division Budgeted Budgeted Planned Courses Enrollment Credit Hours Requiring Computer WorkLiberal Arts .............…
Thayne Company has 30 clerks that work in its Accounts Payable Department. A study revealed the following activities and the relative time demanded by each activity: Required: Classify the four activities as value-added or non-value-added, and calculate the clerical cost of each activity. For non-value-added activities, indicate why they are non-value-added.
ABC Manufacturing is a producer of a local product used in house cleaning, called Agent C. The production manager is required to present a production report for the month August, however he got no idea on what information he needed for the report, and what analysis could be made to help the top management on their decision-making. The production manager sought your expertise on the subject matter and gave to you the following information: Sales (in Pesos) 4,957,875.00 22,500.00 Sales Volume Variable Costs: Cost of Direct Raw Materials 895,000.00 530,000.00 124,200.00 Cost of Direct Labor Cost of Packaging Materials Fixed Costs: Monthly Depreciation Monthly Rent of Warehouse Fixed Monthly Allowance for Electricity Other Fixed Manufacturing Overhead 650,000.00 100,000.00 675,000.00 146,700.00 Required: SENSITIVITY ANALYSIS If the selling price per unit is increased by 20% of its current price while the variable cost per unit is also increased by 30%, compute the following: a. Compute the…
ABC Manufacturing is a producer of a local product used in house cleaning, called Agent C. The production manager is required to present a production report for the month August, however he got no idea on what information he needed for the report, and what analysis could be made to help the top management on their decision-making. The production manager sought your expertise on the subject matter and gave to you the following information: Sales (in Pesos) 4,957,875.00 22,500.00 Sales Volume Variable Costs: Cost of Direct Raw Materials 895,000.00 530,000.00 124,200.00 Cost of Direct Labor Cost of Packaging Materials Fixed Costs: Monthly Depreciation Monthly Rent of Warehouse Fixed Monthly Allowance for Electricity Other Fixed Manufacturing Overhead 650,000.00 100,000.00 675,000.00 146,700.00 Required: SENSITIVITY ANALYSIS If the selling price per unit is increased by 20% of its current price while the variable cost per unit is also increased by 30%, compute the following: g. How many…
ABC Manufacturing is a producer of a local product used in house cleaning, called Agent C. The production manager is required to present a production report for the month August, however he got no idea on what information he needed for the report, and what analysis could be made to help the top management on their decision-making. The production manager sought your expertise on the subject matter and gave to you the following information: Sales (in Pesos) 4,957,875.00 22,500.00 Sales Volume Variable Costs: Cost of Direct Raw Materials 895,000.00 530,000.00 124,200.00 Cost of Direct Labor Cost of Packaging Materials Fixed Costs: Monthly Depreciation Monthly Rent of Warehouse Fixed Monthly Allowance for Electricity Other Fixed Manufacturing Overhead 650,000.00 100,000.00 675,000.00 146,700.00 Required: BREAKEVEN ANALYSIS 1. Compute the selling price per unit of Agent C. 2. Compute the variable cost per unit of Agent C. 3. Compute the variable cost rate of Agent C. 4. Compute the…