29 Jun Question Chapters 1-6 Principles of Accounting II
Question
Chapters 1-6
Principles of Accounting II
1. Maintenance costs at a Tierce Corporation factory are listed below:
Machine – Hours
Maintenance Cost
January
4,198
$ 60,787
February
4,161
$ 60,545
March
4,114
$ 59,859
April
4,156
$ 55,785
May
4,177
$ 60,650
June
4,135
$ 59,670
July
4,190
$ 60,726
August
4,169
$ 60,546
September
4,068
$ 59,352
Management believes that maintenance cost is a mixed cost that depends on machine-hours. Using the
high-low method to estimate the variable and fixed components of this cost, these estimates would be
closest to:
$6.54 per machine-hour; $33,332 per month
$13.42 per machine-hour; $55,785 per month
$11.04 per machine-hour; $14,441 per month
$11.04 per machine-hour; $15,876 per month
2.
Sperberg Corporation’s operating leverage is 4.8. If the company’s sales increase by 13.75%, i
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