E5.2 (LO 1), AP Shingle Enterprises is considering manufacturing a new product. It projects the cost of direct materials and rent for arange of output as follows.InstructionsOutputin Units1,0002,0003,0004,0005,0006,0007,0008,0009,00010,00011,000RentCost$5,0005,0008,0008,0008,0008,0008,0008,00010,00010,00010,000DirectMaterials$4,0007,2009,00012,00015,00018,00021,00024,00029,30035,00044,000a. Diagram the anticipated behavior of each cost for outputs ranging from 1,000 to 11,000 units.b. Determine the relevant range of activity for this product based on the cost behavior of each input.c. Calculate the unit variable costs within the relevant range.d. Indicate the fixed cost within the relevant range.Determine fixed costs and unit variable costs using the high-low method and prepare graph.

E5.2 (LO 1), AP Shingle Enterprises is considering manufacturing a new product. It projects the cost of direct materials and rent for a range of output as follows. Output in Units 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000 11,000 Rent Cost $ 5,000 5,000 8,000 8,000 8,000 8,000 8,000 8,000 10,000 10,000 10,000 Direct Materials $ 4,000 7,200 9,000 12,000 15,000 18,000 21,000 24,000 29,300 35,000 44,000 Instructions a. Diagram the anticipated behavior of each cost for outputs ranging from 1,000 to 11,000 units. b. Determine the relevant range of activity for this product based on the cost behavior of each input. c. Calculate the unit variable costs within the relevant range. d. Indicate the fixed cost within the relevant range. Determine fixed costs and unit variable costs using the high-low method and prepare graph.

E5.2 (LO 1), AP Shingle Enterprises is considering manufacturing a new product. It projects the cost of direct materials and rent for a range of output as follows. Output in Units 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000 11,000 Rent Cost $ 5,000 5,000 8,000 8,000 8,000 8,000 8,000 8,000 10,000 10,000 10,000 Direct Materials $ 4,000 7,200 9,000 12,000 15,000 18,000 21,000 24,000 29,300 35,000 44,000 Instructions a. Diagram the anticipated behavior of each cost for outputs ranging from 1,000 to 11,000 units. b. Determine the relevant range of activity for this product based on the cost behavior of each input. c. Calculate the unit variable costs within the relevant range. d. Indicate the fixed cost within the relevant range. Determine fixed costs and unit variable costs using the high-low method and prepare graph.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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