ABM Week 1&2

Boxes used for packaging

• Variable cost

• Fixed cost

Financial manager salary

• Product cost

• Period cost

Yarn used in scarf production

• Direct cost

• Indirect cost

Commissions paid to automobile salespersons

• Variable cost, product cost

• Fixed cost, product cost

• Variable cost, period cost

• Variable cost, period cost

Annual fire-insurance policy for the whole plant

• Variable, Period, Administrative

• Fixed, Period, Selling

• Variable, Product, Direct

• Fixed, Product, Indirect

Wages of workers assembling laptop

• Variable, Manufacturing, Direct

• Variable, Manufacturing, Indirect

• Variable, Period, Selling

• Fixed, Period, Selling

Jiaxu Inc. is currently analyzing distribution costs to its customers for preparing the distribution cost budget for 2023. After several discussions with related departments, it is found that B is mainly driven by A.

Which months have the highest and lowest value?

• December, January

• September, January

• October, March

• July, June

Estimate the slope of the cost function

• 40.5

• 38.6

• 37.4

• 36

Answer explanation

Estimate distribution costs function using the high-low point method!

• Shipping Cost = 5,503 + (37.4 x unit shipped)

• Shipping Cost = 4,663 + (37.4 x unit shipped)

• Shipping Cost = 5,663 + (37.4 x unit shipped)

• Shipping Cost = 5,660 + (37.4 x unit shipped)

Jiaxu Inc. forecasts that in 2023 there will be 10,000 orders received. Calculate the estimated distribution costs in 2023

Cost function --> Shipping Cost = 5,663 + (37.4 x unit shipped)

• $ 1,250,550

• $ 2,250,550

• $ 3,250,550

• $ 4,250,550