Exercise 3-26 Name:
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.
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 5,475$ 6,295$ 7,115$ 7,935$
b.
21.90$ 20.98$ 20.33$ 19.84$
c.
Cost per direct labor hour 20.33$
Times return 1.40
Hourly charge 28.46$
Times hours per repair 1.25
Charge per customer repair 35.58$
Solution
Flexible Budget
Cost per Direct Labor Hour (DLH)
Average Charge to Earn 40% Return At 350 DLH