The Following Data Were Obtained from the Accounting Information System

question 66

Essay

The following data were obtained from the accounting information system of POC Corporation:
Production
Units Raw Materials Factory Manager
Month Produced Used Supplies Salary
January 60 $1,560 $550 $3,000
February 80 2,000 700 3,000
March 50 1,300 475 3,000
April 30 775 325 3,000
a)Describe the behaviour of each of the costs shown above as fixed, variable, or mixed. You may wish to draw scatter plots or analyze the cost using your knowledge of costs and the actual variation in cost pattern from above (in other words, perform an informal analysis at the account level).
b)Use the data for February and March and the two-point method to determine a cost function for any mixed cost(s).
c)Use the high-low method to determine a cost function for any mixed cost(s).

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Definitions:

Taxable Event

A financial transaction that may result in taxes owing to the government.

Short-term Capital Gain

A profit realized from the sale of an asset held for less than a year, often taxed at a different rate than long-term capital gains.

Long-term Capital Gain

Profit from the sale of an asset held for more than a year, typically subject to a lower tax rate.

Mutual Fund Prospectus

A legal document provided by mutual funds to potential investors, detailing the fund's objectives, risks, performance, and expenses.