# G13 CHAPTER 5 WP

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```					                                                                  Name___________________________
Q-2
What effect does an increase in volume have on ---

a. Unit fixed costs?

b. Unit variable costs?

c. Total fixed costs?

d. Total variable costs?

Q5-8
Classify the following fixed costs as normally being either committed or discretionary:

a. Depreciation on buildings

c. Research

d. Long-term equipment leases

e. Pension payments to the firm’s retirees

f.   Management development and training

Q5-15
What is the contribution margin?
Exercise 5-6                    Name___________________________
1.
Total
Units Shipped   Shipping Expense

Variable cost element:

Fixed cost element:

Cost formula:

2a. See next page for graph
2.b.

3.
Exercise 5-8                                          Name___________________________

1.
Guest-Days      Custodial
Supplies Expense

Variable cost element:

Fixed cost element:

Cost formula:

2.     Custodial supplies expense at an occupancy of 11,000 guest-days:
Exercise 5-9   Name___________________________
1.

2.b.

3.
Exercise 5-4                                  Name___________________________
1.
THE ALPINE HOUSE, INC.
Income Statement (Contribution Format)—Ski Department
For the Quarter Ended March 31

2.     What was the contribution toward fixed expenses and profits from each pair of
skis sold during the quarter?
Exercise 5-5                                                      Name___________________________
1.       Complete the schedule of total and unit costs.
Units produced and sold
30,000                 40,000        50,000
Total costs:
\$180,000
Variable costs ............................................................................
300,000
Fixed costs ................................................................................
\$480,000
Total costs .................................................................................
Cost per unit:
Variable cost ..............................................................................
Fixed cost ..................................................................................
Total cost per unit ......................................................................

2.    Contribution format income statement with 45,000 units of production and sales,
and a sales price of \$16 each.
Harris Company
Income Statement (Contribution Format)
Problem 5-12                               Name___________________________

1.
Cost of Goods Sold
Shipping expense
Salaries & commissions
Insurance expense
Depreciation expense

2.      Analysis of the mixed expenses:
?_________            ?________
Units       Expense              Expense

Variable cost element:

_________ Expense:

_________ Expense

Fixed cost element::

_________ Expense:

_________ Expense

Cost formulas:
_________ Expense:

_________ Expense
Problem 5-12, cont.                   Name___________________________

3.

MORRISEY & BROWN LTD,
Problem 5-13                                           Name___________________________
1.
Situation                      Graph #
a.

b.

c.

d.

e.

f.

g.

h.

i.

2.      How would knowledge of cost behavior patterns such as those above be of help to a manager in
analyzing the cost structure of his or her firm?
Problem 5-19                                           Name___________________________

1. Direct labor cost versus the number of paid days
Y
\$18,000

\$16,000

\$14,000
Direct Labor Cost

\$12,000
\$10,000
\$8,000

\$6,000

\$4,000

\$2,000

\$0                                                    X
0         50              100                150
Thousands of Units Produced

2. Direct labor cost versus the number of paid days:

Y
\$18,000
\$16,000
\$14,000
Direct Labor Cost

\$12,000
\$10,000
\$8,000
\$6,000

\$4,000
\$2,000
\$0                                                        X
0    5          10      15          20         25
Number of Workdays
3.

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