【正文】 The McGrawHill Companies, Inc., 2023 Irwin/McGrawHill The Scattergraph Method Slope = Change in cost Change in units Horizontal distance is the change in activity. 0 1 2 3 4 * Total Cost in 1,000’s of Dollars 10 20 0 * * * * * * * * * Activity, 1,000’s of Units Produced X Y Vertical distance is the change in cost. 169。 The McGrawHill Companies, Inc., 2023 Irwin/McGrawHill If sales salaries and missions are $10,000 when 80,000 units are sold and $14,000 when 120,000 units are sold, what is the fixed portion of sales salaries and missions? a. $ 2,000 b. $ 4,000 c. $10,000 d. $12,000 The HighLow Method To t a l c os t = To t a l f i x e d c os t + To t a l v a r i a bl e c os t$ 1 4 , 0 0 0 = To t a l f i x e d c os t +( $ 0 . 1 0 1 2 0 , 0 0 0 un i t s )To t a l f i x e d c os t = $ 1 4 , 0 0 0 $ 1 2 , 0 0 0To t a l f i x e d c os t = $ 2 , 0 0 0169。 The McGrawHill Companies, Inc., 2023 Irwin/McGrawHill If sales salaries and missions are $10,000 when 80,000 units are sold and $14,000 when 120,000 units are sold, what is the variable portion of sales salaries and mission? a. $ per unit b. $ per unit c. $ per unit d. $ per unit The HighLow Method 169。 The McGrawHill Companies, Inc., 2023 Irwin/McGrawHill U ni t s C os tH i gh a c t i v i t y l e v e l 9 , 0 0 0 9 , 7 0 0$ Low a c t i v i t y l e v e l 5 , 0 0 0 6 , 1 0 0 C ha nge 4 , 0 0 0 3 , 6 0 0$ The HighLow Method ? Unit variable cost = $3,600 247。 and then ? express the costs in equation form Y = a + bX. The HighLow Method U ni t s C os tH i gh a c t i v i t y l e v e l 9 , 0 0 0 9 , 7 0 0$ Low a c t i v i t y l e v e l 5 , 0 0 0 6 , 1 0 0 C ha nge 4 , 0 0 0 3 , 6 0 0$ 169。 The McGrawHill Companies, Inc., 2023 Irwin/McGrawHill Account Analysis Each account is classified as either variable or fixed based on the analyst’s knowledge of how the account behaves. 169。 The McGrawHill Companies, Inc., 2023 Irwin/McGrawHill Fixed Monthly Utility Charge Variable Utility Charge Activity (Kilowatt Hours) Total Utility Cost Mixed Costs X Y 169。 The McGrawHill Companies, Inc., 2023 Irwin/McGrawHill Example: Office space is available at a rental rate of $30,000 per year in increments of 1,000 square feet. As the business grows more space is rented, increasing the total cost. Fixed Costs and Relevant Range Continue 169。 The McGrawHill Companies, Inc., 2023 Irwin/McGrawHill Activity Total Cost Economist’s Curvilinear Cost Function Accountant’s StraightLine Approximation (constant unit variable cost) The Linearity Assumption and the Relevant Range 169。 The McGrawHill Companies, Inc., 2023 Irwin/McGrawHill Fixed costs are usually characterized by: a. Unit costs that remain constant. b. Total costs that increase as activity decreases. c. Total costs that increase as activity increases. d. Total costs that remain constant. Cost Behavior 169。 The McGrawHill Companies, Inc., 2023 Irwin/McGrawHill Total Fixed Cost Your monthly basic telephone bill probably does not change when you make more local calls. Number of Local Calls Monthly Basic Telephone Bill 169。 The McGrawHill Companies, Inc., 2023 Irwin/McGrawHill Product Costs Versus Period Costs Product costs include direct materials, direct labor, and manufacturing overhead. Period costs are not included in product costs. They are expensed on the ine statement. Inventory Cost of Good Sold Balance Sheet Ine Statement Sale Expense Ine Statement 169。 The McGrawHill Companies, Inc., 2023 Irwin/McGrawHill Direct Labor Those labor costs that can be easily traced to individual units of product. Example: Wages paid to automobile assembly workers 169。169。 The McGrawHill Companies, Inc., 2023 Irwin/McGrawHill Direct Materials Those materials that bee an integral part of the product and that can be conveniently traced directly to it. Example: A radio installed in an automobile 169。 The McGrawHill Companies, Inc., 2023 Irwin/McGrawHill Nonmanufacturing Costs Marketing and selling costs . . . ?Costs necessary to get the order