Total Electricity Costs 3941.84 3654.87 3168.75 2797.74 3117.86 3263.29 3548.95
ID: 2399339 • Letter: T
Question
Total Electricity Costs
3941.84 3654.87 3168.75 2797.74 3117.86 3263.29 3548.95 3604.75 3614.84 3773.05 3896.88 4179.03 ll Singtel 3G 2:47 PM 82%- Assignment.pdf Ass Assume that monthly electricity costs (based on the cheapest electricity provider) and production levels from Part 1 are given as historical data. Complete this table and answer required questions using the following assumptions: Direct material cost per cake is 60 cents Each cake requires 10 minutes direct labour work and the labour rate is $24 per hour - Use the total number of cakes as the cost driver. * The relevant range is between 6,500 and 9,800 cakes Totalentespenses cs ect Dired Month Total akesElectricity entOther ,500 3,000 8,003 3,000 7,500 8.200 8,300 3,000 966 8.544 3,000 9.900 10,000 Required 1 Use your judgement to classify costs as fixed, vaniable or mixed. Explain your basis for your classification. 2. Draw a graph for each cost to demonstrate its behaviour using scatter diagram 3. Estimate the total cost formula (monthily) for the bakery using the high-low and regression methods for mixed costs Estimate the cost of producing 6400, 8,900 and 9,900 cakes per month using the total cost formulas based on both regression and high-low methods Explain your results. 4. ACC20014 Open With PrintExplanation / Answer
Direct labour Cost calculated as: 1st month = 9500 * (10/60) * 24 = 38,000 $
1)
Rent Expenses are Fixed Costs.
A cost that does not change, in total, with the change in activity is called fixed cost.
Other Expenses, Direct Material Cost, Direct labour costs are Variable Costs.
A cost that changes, in total dollar amount, with the change in the level of activity is called variable cost.
Electricity Costs given are Mixed Costs.
A cost that has the characteristics of both variable and fixed cost is called mixed or semi-variable cost. Example of mixed or semi-variable cost is electricity bill. The electricity bill can be divided into two parts – (1) line rent and (2) cost of units consumed. The line rent is not affected by the consumption of electricity whereas the cost of units consumed varies with the change in units consumed.
Not Enough Information for mixed costs are given. Hence can solve that much. Better provide full information about Electricity charges (i.e. charges per unit, any fixed or service charges etc).
Month Total Cakes Total Electricity Cost Rent Other Expenses Direct Materials Costs (60 cents or 0.60$) Direct Labour Costs(24$ per hour) Total Varible Costs 1 9500 3941.84 3000 8800 5700 38000 52,500 2 8800 3654.87 3000 9500 5280 35200 49,980 3 7500 3168.75 3000 8003 4500 30000 42,503 4 6500 2797.74 3000 7500 3900 26000 37,400 5 7200 3117.86 3000 7536 4320 28800 40,656 6 7500 3263.69 3000 9565 4500 30000 44,065 7 8200 3548.95 3000 9676 4920 32800 47,396 8 8300 3604.75 3000 10007 4980 33200 48,187 9 8500 3614.84 3000 8544 5100 34000 47,644 10 9000 3773.05 3000 10454 5400 36000 51,584 11 9400 3896.88 3000 9900 5640 37600 53,140 12 10000 4179.03 3000 10000 6000 40000 56,000