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Acc 400 Week 1 Individual Assignment

Week 1 Assignment from the textbook Nancy Schwartz ACC/400 January 25, 2016 Lee Kroll BE16.9 Star Repairs Co. does all the repair work for a medium-sized manufacturer of handheld computer games. The games are sent directly to Star, and after the games are repaired, Star bills the gam manufacturer for cost plus a 20 percent markup. In the month of February, purchases of parts (replacement parts) by Star amounted to $97,000, the beginning of inventory of parts was $38,500, and the ending inventory of parts was $15,250. Payments to repair technicians during the month of February totaled $52,500. Overhead incurred was $121,000. a. What was the cost of materials used for repair work during the month of February? $38,500 + $97,000 – $15,250 = $120,250 b. What was the prime cost for February? $120,250 + $52,500 = $172,750 c. What was the conversion cost for February? $52,500 + $121,000 = $173,500 d. What was the total repair cost for February? $120,250 + $52,500 + 121,000 = $293,750

2 Week Three Textbook Problems •E20.1 Listed below are nine technical accoun±ng terms introduced in this chapter: Variable costs Relevant range Contribu±on margin Break-even point Fixed costs Semivariable costs Economies of scale Sales mix Unit contribu±on margin Each of the following statements may (or may not) describe one of these technical terms. For each statement, indicate the accoun±ng term described, or answer “None” if the statement does not correctly describe any of the terms. a. The level of sales at which revenue exactly equals costs and expenses. Break-even point b. Costs that remain unchanged despite changes in sales volume. Fixed costs c. The span over which output is likely to vary and assump±ons about cost behavior generally remain valid. Relevant range d. Sales revenue less variable costs and expenses. None, opera±ng income e. Unit sales price minus variable cost per unit. Unit contribu±on margin f. The reduc±on in unit cost achieved from a higher level of output. Economies of scale g. Costs that respond to changes in sales volume by less than a propor±onate amount. semivariable costs h. Opera±ng income less variable costs. Contribu±on margin •E20.7 MURDER TO GO! writes and manufactures murder mystery parlor games that it sells to retail stores. The following is per-unit informa±on rela±ng to the manufacture and sale of this product: Unit sales price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 30 Variable cost per unit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Fixed costs per year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 360,000 Determine the following, showing as part of your answer the formula that you used in your computa±on. For example, the formula used to determine the contribu±on margin ra±o (part a ) is: Contribu±on Margin Ra±o 5 Unit Sales Price 2 Variable Costs per Unit __________ __U__n_it_ S__a_l e_s_ P__r_ic_e_ __ _ ________ a. Contribu±on margin ra±o.