To aid in planning, Jay Corporation is preparing a contribution format income statement. Budgeted information for...
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To aid in planning, Jay Corporation is preparing a contribution format income statement. Budgeted information for Quarter 1 of Year 3: Sales in units Sales price per unit $ After analyzing expenses, the company has determined the following cost patterns. Cost of goods sold $ Sales commissions a Administrative salaries Rent expense Depreciation expense 4 7 Year 1 Quarter 1 9 Quarter2 10 Quarter 3 1 Quarter 4 2 year 2 13 Quarter 1 14 Quarter2 25 Quarter 3 26 Quarter 4 7 $ $ $ 28 Use the data to answer the following. 29 Management has concluded that shipping expense is a mixed cost. Units shipped and the related shipping cost over the last eight quarters are: 17,000 48.00 $ $ 29.00 per unit 9.50% per dollar of sales $ $ 45,000.00 per quarter 27,000.00 per quarter 36,000.00 per quarter Total Shipping Cost $ $ $ $ 67,000.00 94,000,00 89,800.00 92,600.00 72,500.00 80,000.00 84,000.00 100,000.00 Units 12,500 21,000 13,800 20,000 13,700 14,000 14,300 22,500 Required 1. Using the high-low method, determine a cost formula for shipping expenses. 2. Prepare a contribution format income statement for Quarter 1 of Year 3. To aid in planning, Jay Corporation is preparing a contribution format income statement. Budgeted information for Quarter 1 of Year 3: Sales in units Sales price per unit $ After analyzing expenses, the company has determined the following cost patterns. Cost of goods sold $ Sales commissions a Administrative salaries Rent expense Depreciation expense 4 7 Year 1 Quarter 1 9 Quarter2 10 Quarter 3 1 Quarter 4 2 year 2 13 Quarter 1 14 Quarter2 25 Quarter 3 26 Quarter 4 7 $ $ $ 28 Use the data to answer the following. 29 Management has concluded that shipping expense is a mixed cost. Units shipped and the related shipping cost over the last eight quarters are: 17,000 48.00 $ $ 29.00 per unit 9.50% per dollar of sales $ $ 45,000.00 per quarter 27,000.00 per quarter 36,000.00 per quarter Total Shipping Cost $ $ $ $ 67,000.00 94,000,00 89,800.00 92,600.00 72,500.00 80,000.00 84,000.00 100,000.00 Units 12,500 21,000 13,800 20,000 13,700 14,000 14,300 22,500 Required 1. Using the high-low method, determine a cost formula for shipping expenses. 2. Prepare a contribution format income statement for Quarter 1 of Year 3.
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Managerial Accounting
ISBN: 978-0176223311
1st Canadian Edition
Authors: Karen Wilken Braun, Wendy Tietz, Walter Harrison, Rhonda Pyp
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