Exercise 3-28

Name:

Solution

Insert answers into the gray-shaded cells of columns E, G, I and K. If an answer is

incorrect, the word “wrong” will appear.

a.

Flexible Budget

250

300

350

400

Variable costs:

Supplies

$ 1,000

$ 1,200

$ 1,400

$ 1,600

Direct labor

    1,750

    2,100

    2,450

    2,800

Utilities

    1,350

    1,620

    1,890

    2,160

Fixed costs:

Direct labor

       500

       500

       500

       500

Utilities

       350

       350

       350

       350

Rent

       450

       450

       450

       450

Advertising

         75

         75

         75

         75

Total cost

b.

Cost per Direct Labor Hour (DLH)

$       –  

$       –  

$       –  

$       –  

c.

Average Charge to Earn 40% Return At 350 DLH

Cost per direct labor hour

$ 20.33

Times return

      1.40

Hourly charge

Times hours per repair

      1.25

Charge per customer repair

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