Beruflich Dokumente
Kultur Dokumente
(b) Using these criteria as a guideline, the classification is as follows: Direct materials Direct labor Utilities Variable Variable Mixed Rent Maintenance Supervisory salaries Fixed Mixed Fixed
EXERCISE 232 (a) Maintenance Costs: $4,900 − $2,900 $2,000 = = $4 variable cost per machine 500 800 − 300
hour
Thus, maintenance costs are $1,700 per month plus $4 per machine hour.
EXERCISE 232 (Continued) (b)
COSTS $5,000 $4,000 $3,000 $2,000 $1,700 $1,000 Fixed Cost Element Variable Cost Element Total Cost Line $4,900
200
400
600
800
Machine Hours
PROBLEM 234B (a) Current breakeven point: $40X = $22X + $288,000 (where X = pairs of shoes) $18X = $288,000 X = 16,000 pairs of shoes New breakeven point: $32,000) $38X = $22X + ($288,000 + $16X = $320,000
The proposed changes will raise the breakeven point 4,000 units. This is a significant increase. Margin of safety is 3% lower and net income is $8,000 lower. The recommendation is to not accept the proposed changes.