Question: A cost analyst showed the general manager a graph that portrayed the firm's electricity cost as semivariable. The general manager looked at the graph and

A cost analyst showed the general manager a graph that portrayed the firm's electricity cost as semivariable. The general manager looked at the graph and said: 'This fixed-cost component doesn't look right to me. If we shut down the plant for six months, we wouldn't incur half those costs'. If you were the cost analyst, how would you respond?

Step by Step Solution

★★★★★

3.49 Rating (166 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

The cost analyst should respond by pointing out that in mos... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

1337-B-A-A-F-V-M(78).docx

120 KBs Word File

Students Have Also Explored These Related Advanced Accounting Questions!

A cost analyst showed the company president a graph that portrayed the firms utility cost as semivariable. The president criticized the graph by saying, This fixed-cost component doesnt look right to...

The Outdoor Division of Rugged Inc. uses absorption costing for profit reporting. The general manager of the Outdoor Division is concerned about meeting the income objectives of the division. At the...

The Northeast Division of Confield Inc. uses absorption costing for profit reporting. The general manager of the Northeast Division is concerned about meeting the income objectives of the division....

3.11 A cost analyst showed the general manager a graph that portrayed the firm's electricity cost as semivariable. The general manager looked at the graph and said: 'This fixed-cost component doesn't...

A cost analyst showed the general manager a graph that portrayed the firm's electricity cost as semi variable. The general manager looked at the graph and said: 'This fixed-cost component doesn't...

Briefly discuss the cost-volume-profit analysis model and how it is used. Use the attached PDF. APA Citation. 300 words. REVISED PAGES 3 Chapter Three 1 Fundamentals of Cost-Volume-Prot Analysis...

Controller, Judy Koch, in a recent speech said, "I rarely see a real variable cost or a truly fixed cost." What did she mean? Include in your response an explanation of the difference in behavior of...

Question 6 Why did Joyson follow a supportive-partnership approach? To support your answer, include an explanation of the differences between a classic and a supportive-partnership approach...

The requirements are in world file. The pdf file includes the case. Only one-page write. Answer following questions and write one page (double space) What are the challenges of exiting private equity...

The following data (stored in Movie) represent the yearly movie attendance (in billions) from 2001 to 2009: Year Attendance 2001........................1.44 2002........................1.60...

A golf ball is hit with an initial speed of at an angle less than 45o above the horizontal. (a) The horizontal velocity component is (1) greater than, (2) equal to, (3) less than the vertical...

On June 1, the unpaid balance in an account was $193. On June 11, a payment of $20 was made. The interest rate per month was 1.5% per month of the average daily balance. Find the new balance at the...

3. Why did Qantas deal with the shock of September 11, 2001 much better than Swissair?

A piece of laborsaving equipment has just come onto the market that Mitsui Electronics, Ltd., could use to reduce costs in one of its plants in Japan. Relevant data relating to the equipment follow...

Labeau Products, Ltd., of Perth, Australia, has $35,000 to invest. The company is trying to decide between two alternative uses for the funds as follows: The companys discount rate is 18%. Required:...

Nicks Novelties, Inc., is considering the purchase of electronic pinball machines to place in amusement houses. The machines would cost a total of $300,000, have an eight-year useful life, and have a...

o. to points) Given a line segment of unit length, show that you can construct with straightedge and compass a segment of length Vn for any natural number n. Hint: How would you draw a line of length...

Zholtan is a civil engineer. He is alarmed by a report that a bridge in a nearby town recently collapsed. This is an unusual event, but he knows that it is far from impossible; nationwide statistics...

You are evaluating a project for your company. You estimate the sales price to be $500 per unit and sales volume to be 2,000 units in year 1; 3,000 units in year 2; and 1,500 units in year 3. The...