PL 8/31/2019

2-18

A.
Direct- Traceable to number of individuals
Fixed- because the fixed amount paid to an individual is 50$

B.
Indirect cost - not traceable to number of individuals
Fixed cost - Annual cost

C.
Indirect cost - records are not kept
Variable cost - total cost Is dependent on number of calls

D.
Direct cost – traceable to medical products
Fixed cost – Fixed retainer paid to leader

E.
Direct - traceable
Variable – cost Is dependent on number of individuals

F.
Indirect – Leasing cost
Fixed – Leasing cost

G.
Direct – traceable
Variable – dependent on number of interviews

H.
Indirect- No mileage breakdowns
Variable- dependent on number of miles driven
2-21

1. Draw a graph of the total monthly costs of the three plans for different levels of monthly long-distance
calling.

Plan A:

Plan A
60

50

40

30

20

10

0
100 min 240 min 510 min

Plan A

*Values at the left are in US$

Plan B:
Plan B
40
35
30
25
20
15
10
5
0
100 min 240 min 510 min

Plan B

Plan C:
 Plan C
60

50

40

30

20

10

0
100 240 510

Plan C

2. Which plan should Ashton choose if she expects to make:

a.) 100 minutes of long distance calls

Plan A = 100 minutes * 10 cents = 10$

Plan B = Fixed amount If 240 minutes or less = 15$

Plan C = Fixed amount if 510 minutes or less = 22$

Answer = Plan A

b.) 240 minutes of long distance calls

Plan A = 240 minutes * 10 cents = 24$

Plan B = Fixed amount at 240 minutes = 15$

Plan C = Fixed amount if 510 minutes or less = 22$

Answer = Plan B

c.) 540 minutes of long distance calls

Plan A = 540 minutes * 10 cents = 54$
Plan B = 15$ + (200 minutes * 8 cents) = 31$
 Plan C = 22$ + ( 30 minutes * 5 cents ) = 23.5$

Answer = Plan C

2-31
1.) Direct materials Inventory 10/1/2011
Beg Inv. 105
COGP 365
COGS (385)
EI 85
2.) Fixed manufacturing overhead costs for October 2011
TFC 450
VFC (265)
FMC 185
3.) Direct manufacturing labor costs for October 2011
DM 85
DML 1075
MO 450
TMC 1610
4.) Work-in-process inventory 10/31/2011
Beg. Inv. 230
Inv in 1610
Inv out (1660)
180
5.) Cost of finished goods available for sale In October 2011
Beg Inv. 130
COGM 1660
COGAS 1,790
6.) Finished goods inventory 10/31/2011
COGAS 1790
EFG 20
COGS 1770