All Related Questions of Relevant Range

Q: Harris Company manufactures and sells a single product. A partially completed

Harris Company manufactures and sells a single product. A partially completed schedule of the company’s total and per unit costs over the relevant range of 30,000 to 50,000 units pro...

Q: Does the concept of the relevant range apply to fixed costs?

Does the concept of the relevant range apply to fixed costs? Explain.

Q: When output volume increases, do fixed costs per unit increase,

When output volume increases, do fixed costs per unit increase, decrease, or stay the same within the relevant range of activity? Explain.

Q: When output volume increases, do variable costs per unit increase,

When output volume increases, do variable costs per unit increase, decrease, or stay the same within the relevant range of activity? Explain.

Q: How does assuming that operating activity occurs within a relevant range affect

How does assuming that operating activity occurs within a relevant range affect cost-volume-profit analysis?

Q: Phoenix Company’s 2013 master budget included the following fixed budget report.

Phoenix Company’s 2013 master budget included the following fixed budget report. It is based on an expected production and sales volume of 15,000 units. Required1. Classify all ite...

Q: Tohono Company’s 2013 master budget included the following fixed budget report.

Tohono Company’s 2013 master budget included the following fixed budget report. It is based on an expected production and sales volume of 20,000 units. Required1. Classify all item...

Q: “I don’t understand this cost report at all,” exclaimed

“I don’t understand this cost report at all,” exclaimed Jeff Mahoney, the newly appointed administrator of Valley General Hospital. â€...

Q: The controller of Saratoga Auto Cylinder Company believes that the identification of

The controller of Saratoga Auto Cylinder Company believes that the identification of the variable and fixed components of the firm’s costs will enable the firm to make better plannin...

Q: The following budget information for the year ending December 31, 2011

The following budget information for the year ending December 31, 2011, pertains to Rust Manufacturing Company’s operations: The following information is also provided: 1. Rust has...

Q: Explain why the concept of relevant range is important when dealing with

Explain why the concept of relevant range is important when dealing with step costs.

Q: Palisades Corporation’s Midwest Division manufactures subassemblies that are used in the corporation’s

Palisades Corporation’s Midwest Division manufactures subassemblies that are used in the corporation’s final products. Lynn Hardt of Midwest’s Profit Planning Department has been assigned the task of...

Q: For the coming year, Loudermilk Inc. anticipates fixed costs of

For the coming year, Loudermilk Inc. anticipates fixed costs of $600,000, a unit variable cost of $75, and a unit selling price of $125. The maximum sales within the relevant range are $2,500,000. a....

Q: Using the data for Loudermilk Inc. in Exercise 21-

Using the data for Loudermilk Inc. in Exercise 21-17, Data from Exercise 21-17: For the coming year, Loudermilk Inc. anticipates fixed costs of $600,000, a unit variable cost of $75, and a unit sell...

Q: Last year Hever Inc. had sales of $500,000

Last year Hever Inc. had sales of $500,000, based on a unit selling price of $250. The variable cost per unit was $175, and fixed costs were $75,000. The maximum sales within Hever Inc.’s relevant ran...

Q: Wolsey Industries Inc. expects to maintain the same inventories at the

Wolsey Industries Inc. expects to maintain the same inventories at the end of 20Y8 as at the beginning of the year. The total of all production costs for the year is therefore assumed to be equal to t...

Q: Last year Parr Co. had sales of $900,000

Last year Parr Co. had sales of $900,000, based on a unit selling price of $200. The variable cost per unit was $125, and fixed costs were $225,000. The maximum sales within Parr Co.’s relevant range...

Q: Belmain Co. expects to maintain the same inventories at the

Belmain Co. expects to maintain the same inventories at the end of 20Y7 as at the beginning of the year. The total of all production costs for the year is therefore assumed to be equal to the cost of...

Q: Gummy Land Candies manufactures jaw-breaker candies in a fully automated

Gummy Land Candies manufactures jaw-breaker candies in a fully automated process. The machine that produces candies was purchased recently and can make 5,000 per month. The machine costs $6,500 and is...

Q: Consolidated Motors specializes in producing one specialty vehicle. It is called

Consolidated Motors specializes in producing one specialty vehicle. It is called Surfer and is styled to easily fit multiple surfboards in its back area and top-mounted storage racks. Consolidated has...

Q: Wisconsin Dairy determined that the total predetermined OH rate for costing purposes

Wisconsin Dairy determined that the total predetermined OH rate for costing purposes is $26.80 per cow per day (referred to as an animal day). Of this, $25.20 is the variable portion. Overhead cost in...

Q: The Splash makes large fiberglass swimming pools and uses machine hours and

The Splash makes large fiberglass swimming pools and uses machine hours and direct labor hours to apply overhead in the Production and Installation departments, respectively. The monthly cost formula...

Q: Harris Company manufactures and sells a single product. A partially completed

Harris Company manufactures and sells a single product. A partially completed schedule of the company’s total and per unit costs over the relevant range of 30,000 to 50,000 units pro...

Q: Does the concept of the relevant range apply to fixed costs?

Does the concept of the relevant range apply to fixed costs? Explain.

Q: Birmingham Chemical evaluates performance in part through the use of flexible budgets

Birmingham Chemical evaluates performance in part through the use of flexible budgets. The selling expense budgets at three activity levels within the relevant range follow. The following assumptions...

Q: The Ramon Company is a manufacturer that is interested in developing a

The Ramon Company is a manufacturer that is interested in developing a cost formula to estimate the variable and fixed components of its monthly manufacturing overhead costs. The company wishes to use...

Q: Kubin Company’s relevant range of production is 18,000 to 22

Kubin Company’s relevant range of production is 18,000 to 22,000 units. When it produces and sells 20,000 units, its average costs per unit are as follows: Average Cost per Unit Direct materi...

Q: : Refer to the data given in Exercise 3. Answer all

Refer to the data given in Exercise 3. Answer all questions independently. Data given in Exercise 3: Kubin Company’s relevant range of production is 18,000 to 22,000 units. When it produces and sell...

Q: Refer to the data given in Exercise 3. Answer all questions

Refer to the data given in Exercise 3. Answer all questions independently. Data from Exercise 3: Kubin Company’s relevant range of production is 18,000 to 22,000 units. When it produces and sells 20,...

Q: Munchak Company’s relevant range of production is 9,000–11

Munchak Company’s relevant range of production is 9,000–11,000 units. Last month the company produced 10,000 units. Its total manufacturing cost per unit produced w...

Q: Martinez Company’s relevant range of production is 7,500 units to

Martinez Company’s relevant range of production is 7,500 units to 12,500 units. When it produces and sells 10,000 units, its average costs per unit are as follows: Average Cost per Unit Direc...

Q: Oslo Company prepared the following contribution format income statement based on a

Oslo Company prepared the following contribution format income statement based on a sales volume of 1,000 units (the relevant range of production is 500 units to 1,500 units): Sales .....................

Q: Bain Corporation makes and sells state-of-the-art

Bain Corporation makes and sells state-of-the-art electronics products. One of its segments produces The Math Machine, an inexpensive calculator. The company’s chief accountant recently prepared the f...

Q: Seattle Bank’s start-up division establishes new branch banks. Each

Seattle Bank’s start-up division establishes new branch banks. Each branch opens with three tellers. Total teller cost per branch is $96,000 per year. The three tellers combined can process up to 90,0...

Q: How is the relevant range of activity related to fixed and variable

How is the relevant range of activity related to fixed and variable cost? Give an example of how the definitions of these costs become invalid when volume is outside the relevant range.

Q: Third World Gamer Inc. manufactures components for computer games within a

Third World Gamer Inc. manufactures components for computer games within a relevant range of 500,000 to 1,000,000 disks per year. Within this range, the following partially completed manufacturing cos...

Q: For the coming year, Cabinet Inc. anticipates fixed costs of

For the coming year, Cabinet Inc. anticipates fixed costs of $60,000, a unit variable cost of $70, and a unit selling price of $100. The maximum sales within the relevant range are $500,000. a. Constru...

Q: Using the data for Cabinet Inc. in Exercise 11-16

Using the data for Cabinet Inc. in Exercise 11-16, (a) determine the maximum possible operating loss, (b) compute the maximum possible operating income, (c) construct a profit volume graph, and (d) est...

Q: Organic Health Care Products Inc. expects to maintain the same inventories

Organic Health Care Products Inc. expects to maintain the same inventories at the end of 20Y8 as at the beginning of the year. The total of all production costs for the year is therefore assumed to be...

Q: Last year, Ridgecrest Inc. had sales of $3,

Last year, Ridgecrest Inc. had sales of $3,200,000, based on a unit selling price of $400. The variable cost per unit was $240, and fixed costs were $1,088,000. The maximum sales within Ridgecrest Inc....

Q: Phoenix Company’s 2015 master budget included the following fixed budget report.

Phoenix Company’s 2015 master budget included the following fixed budget report. It is based on an expected production and sales volume of 15,000 units. Required 1. Classify all it...

Q: Tohono Company’s 2015 master budget included the following fixed budget report.

Tohono Company’s 2015 master budget included the following fixed budget report. It is based on an expected production and sales volume of 20,000 units. Required 1. Classify all ite...

Q: When output volume increases, do fixed costs per unit increase,

When output volume increases, do fixed costs per unit increase, decrease, or stay the same within the relevant range of activity? Explain.

Q: J. P. Alexander claims that the relevant range concept is

J. P. Alexander claims that the relevant range concept is important only for variable costs. (a) Explain the relevant range concept. (b) Do you agree with J. P.’s claim? Explain.

Q: For Lodes Company, the relevant range of production is 40–

For Lodes Company, the relevant range of production is 40–80% of capacity. At 40% of capacity, a variable cost is $4,000 and a fixed cost is $6,000. Diagram the behavior of each cost within the releva...

Q: “The relevant range is indispensable in cost behavior analysis.” Is

“The relevant range is indispensable in cost behavior analysis.” Is this true? Why or why not?

Q: Shingle Enterprises is considering manufacturing a new product. It projects the

Shingle Enterprises is considering manufacturing a new product. It projects the cost of direct materials and rent for a range of output as shown below Instructions: (a) Diagram the behavior of each...

Q: Venetian Company has two production departments, Fabricating and Assembling. At

Venetian Company has two production departments, Fabricating and Assembling. At a department managers’ meeting, the controller uses flexible budget graphs to explain total budgeted costs. Separate gra...

Q: Gundy Company expects to produce 1,200,000 units of

Gundy Company expects to produce 1,200,000 units of Product XX in 2014. Monthly production is expected to range from 80,000 to 120,000 units. Budgeted variable manufacturing costs per unit are direct...

Q: Data for Gundy Company are given in BE22-4. In

Data for Gundy Company are given in BE22-4. In March 2014, the company incurs the following costs in producing 100,000 units: direct materials $525,000, direct labor $596,000, and variable overhead $8...

Q: Cook Company estimates that 300,000 direct labor hours will be

Cook Company estimates that 300,000 direct labor hours will be worked during the coming year, 2014, in the Packaging Department. On this basis, the budgeted manufacturing overhead cost data, shown bel...

Q: DeWitt Company uses flexible budgets to control its selling expenses.

DeWitt Company uses flexible budgets to control its selling expenses. Monthly sales are expected to range from $170,000 to $200,000. Variable costs and their percentage relationship to sales are sales...

Q: Consolidated Minerals (CM) owns the rights to extract minerals from

Consolidated Minerals (CM) owns the rights to extract minerals from beach sands on Fraser Island. CM has costs in three areas: a.Payment to a mining subcontractor who charges $80 per tonne of beach sa...

Q: Yumball Candies manufactures jaw-breaker candies in a fully automated process

Yumball Candies manufactures jaw-breaker candies in a fully automated process. The machine that produces candies was purchased recently and can make 5,000 per month. The machine costs $6,000 and is de...

Q: Stardom Inc. cans peaches for sale to food distributors. All

Stardom Inc. cans peaches for sale to food distributors. All costs are classified as either manufacturing or marketing. Stardom prepares monthly budgets. The March 2015 budgeted absorption-costing sta...

Q: Fallon Company uses flexible budgets to control its selling expenses. Monthly

Fallon Company uses flexible budgets to control its selling expenses. Monthly sales are expected to range from $170,000 to $200,000. Variable costs and their percentage relationship to sales are sales...

Q: Gundy Company expects to produce 1,200,000 units of

Gundy Company expects to produce 1,200,000 units of Product XX in 2020. Monthly production is expected to range from 80,000 to 120,000 units. Budgeted variable manufacturing costs per unit are direct...

Q: Data for Gundy Company are given in BE25.4. In

Data for Gundy Company are given in BE25.4. In March 2020, the company incurs the following costs in producing 100,000 units: direct materials $520,000, direct labor $596,000, and variable overhead $8...

Q: Bumblebee Company estimates that 300,000 direct labor hours will be

Bumblebee Company estimates that 300,000 direct labor hours will be worked during the coming year, 2020, in the Packaging Department. On this basis, the following budgeted manufacturing overhead cost...

Q: The following data relate to a year's budgeted activity for Rickuse Limited

The following data relate to a year's budgeted activity for Rickuse Limited, a company that manufactures one product: ……………………………………………………………………………………………………………………… Units Beginning inventory ………………………...

Q: Kozy Enterprises is considering manufacturing a new product. It projects the

Kozy Enterprises is considering manufacturing a new product. It projects the cost of direct materials and rent for a range of output quantities as shown below: Diagram cost behaviour to determine the...

Q: Sweetum Candies manufactures jaw-breaker candies in a fully automated process

Sweetum Candies manufactures jaw-breaker candies in a fully automated process. The machine that produces candies was purchased recently and can make 4,100 per month. The machine costs $9,000 and is de...

Q: Burst, Inc., cans peaches for sale to food distributors.

Burst, Inc., cans peaches for sale to food distributors. All costs are classified as either manufacturing or marketing. Burst prepares monthly budgets. The March 2012 budgeted absorption-costing incom...

Q: Vincent Company uses flexible budgets to control its selling expenses. Monthly

Vincent Company uses flexible budgets to control its selling expenses. Monthly sales are expected to range from $170,000 to $200,000. Variable costs and their percentage relationship to sales are as f...

Q: Oakley Company estimates that 360,000 direct labour hours will be

Oakley Company estimates that 360,000 direct labour hours will be worked in the packaging department during 2020. Based on that, it has calculated the following budgeted manufacturing overhead cost da...

Q: Alcore Company estimates that 240,000 direct labour hours will be

Alcore Company estimates that 240,000 direct labour hours will be worked in the assembly department during 2020. Based on that, the following budgeted manufacturing overhead data are calculated: Prepa...

Q: Sherrer Company has two production departments: fabricating and assembling. At

Sherrer Company has two production departments: fabricating and assembling. At a department managers' meeting, the controller uses flexible budget graphs to explain the total budgeted costs. Separate...

Q: Dukane Company expects to produce 1.2 million units of product

Dukane Company expects to produce 1.2 million units of product XX in 2020. Monthly production is expected to range from 80,000 to 120,000 units. Budgeted variable manufacturing costs per unit are as f...

Q: Vogel Inc. manufactures memory chips for electronic toys within a relevant

Vogel Inc. manufactures memory chips for electronic toys within a relevant range of 25,000 to 100,000 memory chips per year. Within this range, the following partially completed manufacturing cost sch...

Q: The Managing Director of the Kiddy Toy Company (KTC) needs

The Managing Director of the Kiddy Toy Company (KTC) needs to decide whether a special export order should be accepted or rejected, with reasons provided, for the manufacture of Panda bears. The backg...

Q: Quigley Inc. manufactures memory chips for electronic toys within a relevant

Quigley Inc. manufactures memory chips for electronic toys within a relevant range of 200,000 to 600,000 memory chips per year. Within this range, the following partially completed manufacturing cost...

Q: Oysters Away picks, shucks and packs oysters and then sells them

Oysters Away picks, shucks and packs oysters and then sells them wholesale to fine restaurants across the state. The income statement for last year follows: Pickers, shuckers and packers are employe...

Q: Explain the importance of the relevant range in relation to cost behaviour

Explain the importance of the relevant range in relation to cost behaviour when considering the costs of expanding business activities.

Q: Hixson Company manufactures and sells one product for $34 per unit

Hixson Company manufactures and sells one product for $34 per unit. The company maintains no beginning or ending inventories and its relevant range of production is 20,000 units to 30,000 units. When...

Q: The following information is available for Brownstone Products /

The following information is available for Brownstone Products Required: 1. What was the master budget variance for July, rounded to the nearest whole dollar? Was this variance favorable or unfavora...

Q: Johnny Lee, Inc., produces a line of small gasoline-

Johnny Lee, Inc., produces a line of small gasoline-powered engines that can be used in a variety of residential machines, ranging from different types of lawnmowers, to snowblowers, to garden tools (...

Q: PhotoGraphicImages, Inc (PGI) is an international supplier of graphic

PhotoGraphicImages, Inc (PGI) is an international supplier of graphic and digital photo images that are used in the publishing business and by a variety of firms that need graphic images for their ann...

Q: Define relevant range and explain its use.

Define relevant range and explain its use.

Q: The behaviour of the annual maintenance and repair cost in the Bus

The behaviour of the annual maintenance and repair cost in the Bus Transportation Department of the Summerset Public School District is shown by the solid line in the following graph. The dashed line...

Q: The Midwest Division of the Paibec Corporation manufactures subassemblies that are used

The Midwest Division of the Paibec Corporation manufactures subassemblies that are used in the corporation’s final products. Lynn Hardt of Midwest’s Profit Planning...

Q: “I don’t understand this cost report at all,” exclaimed Jeff

“I don’t understand this cost report at all,” exclaimed Jeff Mahoney, the newly appointed administrator of Mountain View General Hospital. â...

Q: Refer to the data and accompanying information in the Case 6-

Refer to the data and accompanying information in the Case 6-51. Required: 1. Use the high-low method to estimate the cost behaviour for the clinic’s administrative costs. Express t...

Q: Steve Silversmith produces unique and exclusive sterling silver rings, pendants,

Steve Silversmith produces unique and exclusive sterling silver rings, pendants, buckles, and chains. Steve pays one supervisor to oversee the work performed by several part-time silversmiths. He pay...

Q: Morning Dove Company manufactures one model of birdbath, which is very

Morning Dove Company manufactures one model of birdbath, which is very popular. Morning Dove sells all units it produces each month. The relevant range is 0 to 1,500 units, and monthly production cost...

Q: Refer to the information for Morning Dove Company in E5–4

Refer to the information for Morning Dove Company in E5–4. Suppose it sells each birdbath for $25. Required: 1. Calculate the unit contribution margin and contribution margin ratio f...

Q: Dana’s Ribbon World makes award rosettes. Following is information about the

Dana’s Ribbon World makes award rosettes. Following is information about the company: Required: 1. Determine how many rosettes Dana’s must sell to break even. 2. Ca...

Q: Hawk Homes, Inc., makes one type of birdhouse that it

Hawk Homes, Inc., makes one type of birdhouse that it sells for $30 each. Its variable cost is $15 per house, and its fixed costs total $13,840 per year. Hawk currently has the capacity to produce up...

Q: Ivy Kay, Inc., makes one type of doggie sweater that

Ivy Kay, Inc., makes one type of doggie sweater that it sells for $25 each. Its variable cost is $12.50 per sweater and its fixed costs total $8,600 per year. Ivy Kay currently has the capacity to pro...

Q: What is the relevant range and why is it important?

What is the relevant range and why is it important?

Q: Kubin Company’s relevant range of production is 18,000 to 22

Kubin Company’s relevant range of production is 18,000 to 22,000 units. When it produces and sells 20,000 units, its average costs per unit are as follows: Required: 1. Assume the co...

Q: Using the data for Loudermilk Inc. in Exercise 17,

Using the data for Loudermilk Inc. in Exercise 17, (a) Determine the maximum possible operating loss, (b) Compute the maximum possible operating profit, (c) Construct a profit-volume chart, and (d) Es...

Q: Child Play Inc. manufactures electronic toys within a relevant range of

Child Play Inc. manufactures electronic toys within a relevant range of 20,000 to 150,000 toys per year. Within this range, the following partially completed manufacturing cost schedule has been prepa...

Q: The Managing Director of the Kiddy Toy Company (KTC) needs

The Managing Director of the Kiddy Toy Company (KTC) needs to decide whether a special export order should be accepted or rejected, with reasons provided, for the manufacture of Panda bears. The backg...

Q: You are a manager at Spacely Sprockets—a small firm that

You are a manager at Spacely Sprockets—a small firm that manufactures Type A and Type B bolts. The accounting and marketing departments have provided you with the following informati...

Q: What is the relevant range of operations? How is it important

What is the relevant range of operations? How is it important in CVP analysis?

Q: Define the relevant range of activity.

Define the relevant range of activity.

Q: 13. Which of the following describes a fixed cost?

13. Which of the following describes a fixed cost? (a) Any overhead cost that is incurred in the factory of a manufacturing company (b) Any selling, general or administrative cost incurred in a manu...

Q: Seattle Bank’s startup division establishes new branch banks. Each branch opens

Seattle Bank’s startup division establishes new branch banks. Each branch opens with three tellers. Total teller cost per branch is $96,000 per year. The three tellers combined can process up to 90,00...

Q: Bain Corporation makes and sells state-of-the-art

Bain Corporation makes and sells state-of-the-art electronics products. One of its segments produces The Math Machine, an inexpensive calculator. The company’s chief accountant recen...

Q: Kelly and Valdez Tax Services’ Development Department is responsible for establishing new

Kelly and Valdez Tax Services’ Development Department is responsible for establishing new community branches. Each branch opens with four tax accountants. Total cost of payroll per branch is $240,000...

Q: Rooney Company’s electronics division produces a DVD player. The vice president

Rooney Company’s electronics division produces a DVD player. The vice president in charge of the division is evaluating the income statement showing annual revenues and expenses asso...

Q: How is the relevant range of activity related to fixed and variable

How is the relevant range of activity related to fixed and variable cost? Give an example of how the definitions of these costs become invalid when ­volume is outside the ­relevant range.

Q: What is the relevant range of activity as used in budgeting?

What is the relevant range of activity as used in budgeting?

Q: Dotball Candies manufactures jawbreaker candies or gobstoppers in a fully automated process

Dotball Candies manufactures jawbreaker candies or gobstoppers in a fully automated process. The machine that produces candies was purchased recently and can make 4,400 jawbreakers per month. The mach...