Questions from Managerial Accounting

Q: Why do mixed costs pose a problem when it comes to classifying

Why do mixed costs pose a problem when it comes to classifying costs into fixed and variable categories?

Q: Describe the cost formula for a strictly fixed cost such as depreciation

Describe the cost formula for a strictly fixed cost such as depreciation of $15,000 per year.

Q: Describe the cost formula for a strictly variable cost such as electrical

Describe the cost formula for a strictly variable cost such as electrical power cost of $1.15 per machine hour (i.e., every hour the machinery is run, electrical power cost goes up by $1.15).

Q: What is the scatter graph method, and why is it used

What is the scatter graph method, and why is it used? Why is a scatter graph a good first step in separating mixed costs into their fixed and variable components?

Q: What is meant by the best-fitting line?

What is meant by the best-fitting line?

Q: Explain the meaning of the coefficient of determination.

Explain the meaning of the coefficient of determination.

Q: Required: Classify each of the following costs for a jeans

Required: Classify each of the following costs for a jeans manufacturing company as a variable cost, committed fixed cost, or discretionary fixed cost. a. The cost of buttons b. The cost to lease war...

Q: Explain how CVP analysis can be used for managerial planning.

Explain how CVP analysis can be used for managerial planning.

Q: Why do firms like to calculate a percentage column on the income

Why do firms like to calculate a percentage column on the income statement (in which each line item is expressed as a percentage of sales)?

Q: Define the term break-even point.

Define the term break-even point.