Description
My problem is in the word document I attached. All the requirements are in the document. Please refer to the document attached.
Problem 6–37
Cost
Behavior and Analysis;
High-Low
Method
and
Problem 7–38
Sales Mix and Employee
Compensation; Operating
Changes
Complete Problems 6-37 and 7-38 in the textbook. Both of these problems should be completed using Word
rather than Excel.
Save your assignment as Lastname_FirstnameACC650_T4.docx.
Prepare this assignment according to the guidelines found in the APA Style Guide, located in the Student
Success Center. An abstract is not required.
You are required to submit this assignment to Lopeswrite.
Antioch Extraction, which mines ore in Montana, uses a calendar year for both financial-reporting and
tax purposes. The following selected costs were incurred in December, the low point of activity, when
1,500 tons of ore were extracted:
■ Problem 6–37
Cost Behavior and Analysis;
High-Low Method
(LO 6-2, 6-4, 6-5)
2. Total cost for 1,650 tons:
$823,500
Straight-line depreciation ……………………… $ 25,000 Royalties ……………………………….. $135,000
Charitable contributions* ………………………. 11,000 Trucking and hauling ………………. 275,000
Mining labor/fringe benefits …………………… 345,000
*Incurred only in December.
Peak activity of 2,600 tons occurred in June, resulting in mining labor/fringe benefit costs of $598,000,
royalties of $201,000, and trucking and hauling outlays of $325,000. The trucking and hauling outlays
exhibit the following behavior:
Less than 1,500 tons ……………………………………………………………………………………………………………………………. $250,000
From 1,500–1,899 tons ………………………………………………………………………………………………………………………. 275,000
From 1,900–2,299 tons ………………………………………………………………………………………………………………………. 300,000
From 2,300–2,699 tons ………………………………………………………………………………………………………………………. 325,000
Antioch uses the high-low method to analyze costs.
Required:
1. Classify the five costs listed in terms of their behavior: variable, step-variable, committed fixed,
discretionary fixed, step-fixed, or semivariable. Show calculations to support your answers for
mining labor/fringe benefits and royalties.
2. Calculate the total cost for next February when 1,650 tons are expected to be extracted.
3. Comment on the cost-effectiveness of hauling 1,500 tons with respect to Antioch’s trucking/hauling
cost behavior. Can the company’s effectiveness be improved? How?
4. Distinguish between committed and discretionary fixed costs. If Antioch were to experience severe
economic difficulties, which of the two types of fixed costs should management try to cut? Why?
5. Speculate as to why the company’s charitable contribution cost arises only in December.
Lawrence Corporation sells two ceiling fans, Deluxe and Basic. Current sales total 60,000 units, consisting
of 39,000 Deluxe units and 21,000 Basic units. Selling price and variable cost information follow.
■ Problem 7–38
Sales Mix and Employee
Compensation; Operating
Changes
(LO 7-4, 7-5)
2(c). Commissions, total:
$535,600
Deluxe Basic
Selling price ……………………………………………………………………………………………………………………………. $86 $74
Variable cost …………………………………………………………………………………………………………………………… 65 41
Salespeople currently receive flat salaries that total $400,000. Management is contemplating a change
to a compensation plan that is based on commissions in an effort to boost the company’s presence in the
marketplace. Two plans are under consideration:
Plan A: 10% commission computed on gross dollar sales. Deluxe sales are expected to total
45,500 units; Basic sales are anticipated to be 19,500 units.
Plan B: 30% commission computed on the basis of production contribution margins. Deluxe
sales are anticipated to be 26,000 units; Basic sales are expected to total 39,000 units.
Required:
1. Define the term sales mix.
2. Comparing Plan A to the current compensation arrangement:
a. Will Plan A achieve management’s objective of an increased presence in the marketplace?
Briefly explain.
b. From a sales-mix perspective, will the salespeople be promoting the product that one would
logically expect? Briefly discuss.
c. Will the sales force likely be satisfied with the results of Plan A? Why?
d. Will Lawrence likely be satisfied with the resulting impact of Plan A on company
profitability?
Why?
312 Chapter 7 Cost-Volume-Profit Analysis
3. Assume that Plan B is under consideration.
a. Compare Plan A and Plan B with respect to total units sold and the sales mix. Comment on the
results.
b. In comparison with flat salaries, is Plan B more attractive to the sales force? To the company?
Show calculations to support your answers.
Complete Problems 6-37 and 7-38 in the textbook. Both of these problems should be completed using Word
rather than Excel.
Save your assignment as Lastname_FirstnameACC650_T4.docx.
Prepare this assignment according to the guidelines found in the APA Style Guide, located in the Student
Success Center. An abstract is not required.
You are required to submit this assignment to Lopeswrite.
Antioch Extraction, which mines ore in Montana, uses a calendar year for both financial-reporting and
tax purposes. The following selected costs were incurred in December, the low point of activity, when
1,500 tons of ore were extracted:
■ Problem 6–37
Cost Behavior and Analysis;
High-Low Method
(LO 6-2, 6-4, 6-5)
2. Total cost for 1,650 tons:
$823,500
Straight-line depreciation ……………………… $ 25,000 Royalties ……………………………….. $135,000
Charitable contributions* ………………………. 11,000 Trucking and hauling ………………. 275,000
Mining labor/fringe benefits …………………… 345,000
*Incurred only in December.
Peak activity of 2,600 tons occurred in June, resulting in mining labor/fringe benefit costs of $598,000,
royalties of $201,000, and trucking and hauling outlays of $325,000. The trucking and hauling outlays
exhibit the following behavior:
Less than 1,500 tons ……………………………………………………………………………………………………………………………. $250,000
From 1,500–1,899 tons ………………………………………………………………………………………………………………………. 275,000
From 1,900–2,299 tons ………………………………………………………………………………………………………………………. 300,000
From 2,300–2,699 tons ………………………………………………………………………………………………………………………. 325,000
Antioch uses the high-low method to analyze costs.
Required:
1. Classify the five costs listed in terms of their behavior: variable, step-variable, committed fixed,
discretionary fixed, step-fixed, or semivariable. Show calculations to support your answers for
mining labor/fringe benefits and royalties.
2. Calculate the total cost for next February when 1,650 tons are expected to be extracted.
3. Comment on the cost-effectiveness of hauling 1,500 tons with respect to Antioch’s trucking/hauling
cost behavior. Can the company’s effectiveness be improved? How?
4. Distinguish between committed and discretionary fixed costs. If Antioch were to experience severe
economic difficulties, which of the two types of fixed costs should management try to cut? Why?
5. Speculate as to why the company’s charitable contribution cost arises only in December.
Lawrence Corporation sells two ceiling fans, Deluxe and Basic. Current sales total 60,000 units, consisting
of 39,000 Deluxe units and 21,000 Basic units. Selling price and variable cost information follow.
■ Problem 7–38
Sales Mix and Employee
Compensation; Operating
Changes
(LO 7-4, 7-5)
2(c). Commissions, total:
$535,600
Deluxe Basic
Selling price ……………………………………………………………………………………………………………………………. $86 $74
Variable cost …………………………………………………………………………………………………………………………… 65 41
Salespeople currently receive flat salaries that total $400,000. Management is contemplating a change
to a compensation plan that is based on commissions in an effort to boost the company’s presence in the
marketplace. Two plans are under consideration:
Plan A: 10% commission computed on gross dollar sales. Deluxe sales are expected to total
45,500 units; Basic sales are anticipated to be 19,500 units.
Plan B: 30% commission computed on the basis of production contribution margins. Deluxe
sales are anticipated to be 26,000 units; Basic sales are expected to total 39,000 units.
Required:
1. Define the term sales mix.
2. Comparing Plan A to the current compensation arrangement:
a. Will Plan A achieve management’s objective of an increased presence in the marketplace?
Briefly explain.
b. From a sales-mix perspective, will the salespeople be promoting the product that one would
logically expect? Briefly discuss.
c. Will the sales force likely be satisfied with the results of Plan A? Why?
d. Will Lawrence likely be satisfied with the resulting impact of Plan A on company
profitability?
Why?
312 Chapter 7 Cost-Volume-Profit Analysis
3. Assume that Plan B is under consideration.
a. Compare Plan A and Plan B with respect to total units sold and the sales mix. Comment on the
results.
b. In comparison with flat salaries, is Plan B more attractive to the sales force? To the company?
Show calculations to support your answers.
Purchase answer to see full
attachment
rather than Excel.
Save your assignment as Lastname_FirstnameACC650_T4.docx.
Prepare this assignment according to the guidelines found in the APA Style Guide, located in the Student
Success Center. An abstract is not required.
You are required to submit this assignment to Lopeswrite.
Antioch Extraction, which mines ore in Montana, uses a calendar year for both financial-reporting and
tax purposes. The following selected costs were incurred in December, the low point of activity, when
1,500 tons of ore were extracted:
■ Problem 6–37
Cost Behavior and Analysis;
High-Low Method
(LO 6-2, 6-4, 6-5)
2. Total cost for 1,650 tons:
$823,500
Straight-line depreciation ……………………… $ 25,000 Royalties ……………………………….. $135,000
Charitable contributions* ………………………. 11,000 Trucking and hauling ………………. 275,000
Mining labor/fringe benefits …………………… 345,000
*Incurred only in December.
Peak activity of 2,600 tons occurred in June, resulting in mining labor/fringe benefit costs of $598,000,
royalties of $201,000, and trucking and hauling outlays of $325,000. The trucking and hauling outlays
exhibit the following behavior:
Less than 1,500 tons ……………………………………………………………………………………………………………………………. $250,000
From 1,500–1,899 tons ………………………………………………………………………………………………………………………. 275,000
From 1,900–2,299 tons ………………………………………………………………………………………………………………………. 300,000
From 2,300–2,699 tons ………………………………………………………………………………………………………………………. 325,000
Antioch uses the high-low method to analyze costs.
Required:
1. Classify the five costs listed in terms of their behavior: variable, step-variable, committed fixed,
discretionary fixed, step-fixed, or semivariable. Show calculations to support your answers for
mining labor/fringe benefits and royalties.
2. Calculate the total cost for next February when 1,650 tons are expected to be extracted.
3. Comment on the cost-effectiveness of hauling 1,500 tons with respect to Antioch’s trucking/hauling
cost behavior. Can the company’s effectiveness be improved? How?
4. Distinguish between committed and discretionary fixed costs. If Antioch were to experience severe
economic difficulties, which of the two types of fixed costs should management try to cut? Why?
5. Speculate as to why the company’s charitable contribution cost arises only in December.
Lawrence Corporation sells two ceiling fans, Deluxe and Basic. Current sales total 60,000 units, consisting
of 39,000 Deluxe units and 21,000 Basic units. Selling price and variable cost information follow.
■ Problem 7–38
Sales Mix and Employee
Compensation; Operating
Changes
(LO 7-4, 7-5)
2(c). Commissions, total:
$535,600
Deluxe Basic
Selling price ……………………………………………………………………………………………………………………………. $86 $74
Variable cost …………………………………………………………………………………………………………………………… 65 41
Salespeople currently receive flat salaries that total $400,000. Management is contemplating a change
to a compensation plan that is based on commissions in an effort to boost the company’s presence in the
marketplace. Two plans are under consideration:
Plan A: 10% commission computed on gross dollar sales. Deluxe sales are expected to total
45,500 units; Basic sales are anticipated to be 19,500 units.
Plan B: 30% commission computed on the basis of production contribution margins. Deluxe
sales are anticipated to be 26,000 units; Basic sales are expected to total 39,000 units.
Required:
1. Define the term sales mix.
2. Comparing Plan A to the current compensation arrangement:
a. Will Plan A achieve management’s objective of an increased presence in the marketplace?
Briefly explain.
b. From a sales-mix perspective, will the salespeople be promoting the product that one would
logically expect? Briefly discuss.
c. Will the sales force likely be satisfied with the results of Plan A? Why?
d. Will Lawrence likely be satisfied with the resulting impact of Plan A on company
profitability?
Why?
312 Chapter 7 Cost-Volume-Profit Analysis
3. Assume that Plan B is under consideration.
a. Compare Plan A and Plan B with respect to total units sold and the sales mix. Comment on the
results.
b. In comparison with flat salaries, is Plan B more attractive to the sales force? To the company?
Show calculations to support your answers.
Complete Problems 6-37 and 7-38 in the textbook. Both of these problems should be completed using Word
rather than Excel.
Save your assignment as Lastname_FirstnameACC650_T4.docx.
Prepare this assignment according to the guidelines found in the APA Style Guide, located in the Student
Success Center. An abstract is not required.
You are required to submit this assignment to Lopeswrite.
Antioch Extraction, which mines ore in Montana, uses a calendar year for both financial-reporting and
tax purposes. The following selected costs were incurred in December, the low point of activity, when
1,500 tons of ore were extracted:
■ Problem 6–37
Cost Behavior and Analysis;
High-Low Method
(LO 6-2, 6-4, 6-5)
2. Total cost for 1,650 tons:
$823,500
Straight-line depreciation ……………………… $ 25,000 Royalties ……………………………….. $135,000
Charitable contributions* ………………………. 11,000 Trucking and hauling ………………. 275,000
Mining labor/fringe benefits …………………… 345,000
*Incurred only in December.
Peak activity of 2,600 tons occurred in June, resulting in mining labor/fringe benefit costs of $598,000,
royalties of $201,000, and trucking and hauling outlays of $325,000. The trucking and hauling outlays
exhibit the following behavior:
Less than 1,500 tons ……………………………………………………………………………………………………………………………. $250,000
From 1,500–1,899 tons ………………………………………………………………………………………………………………………. 275,000
From 1,900–2,299 tons ………………………………………………………………………………………………………………………. 300,000
From 2,300–2,699 tons ………………………………………………………………………………………………………………………. 325,000
Antioch uses the high-low method to analyze costs.
Required:
1. Classify the five costs listed in terms of their behavior: variable, step-variable, committed fixed,
discretionary fixed, step-fixed, or semivariable. Show calculations to support your answers for
mining labor/fringe benefits and royalties.
2. Calculate the total cost for next February when 1,650 tons are expected to be extracted.
3. Comment on the cost-effectiveness of hauling 1,500 tons with respect to Antioch’s trucking/hauling
cost behavior. Can the company’s effectiveness be improved? How?
4. Distinguish between committed and discretionary fixed costs. If Antioch were to experience severe
economic difficulties, which of the two types of fixed costs should management try to cut? Why?
5. Speculate as to why the company’s charitable contribution cost arises only in December.
Lawrence Corporation sells two ceiling fans, Deluxe and Basic. Current sales total 60,000 units, consisting
of 39,000 Deluxe units and 21,000 Basic units. Selling price and variable cost information follow.
■ Problem 7–38
Sales Mix and Employee
Compensation; Operating
Changes
(LO 7-4, 7-5)
2(c). Commissions, total:
$535,600
Deluxe Basic
Selling price ……………………………………………………………………………………………………………………………. $86 $74
Variable cost …………………………………………………………………………………………………………………………… 65 41
Salespeople currently receive flat salaries that total $400,000. Management is contemplating a change
to a compensation plan that is based on commissions in an effort to boost the company’s presence in the
marketplace. Two plans are under consideration:
Plan A: 10% commission computed on gross dollar sales. Deluxe sales are expected to total
45,500 units; Basic sales are anticipated to be 19,500 units.
Plan B: 30% commission computed on the basis of production contribution margins. Deluxe
sales are anticipated to be 26,000 units; Basic sales are expected to total 39,000 units.
Required:
1. Define the term sales mix.
2. Comparing Plan A to the current compensation arrangement:
a. Will Plan A achieve management’s objective of an increased presence in the marketplace?
Briefly explain.
b. From a sales-mix perspective, will the salespeople be promoting the product that one would
logically expect? Briefly discuss.
c. Will the sales force likely be satisfied with the results of Plan A? Why?
d. Will Lawrence likely be satisfied with the resulting impact of Plan A on company
profitability?
Why?
312 Chapter 7 Cost-Volume-Profit Analysis
3. Assume that Plan B is under consideration.
a. Compare Plan A and Plan B with respect to total units sold and the sales mix. Comment on the
results.
b. In comparison with flat salaries, is Plan B more attractive to the sales force? To the company?
Show calculations to support your answers.
Purchase answer to see full
attachment
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