### Question details

Problem 1-8 John Dough’s bakery in Waxahachie, Texas, specializes in chocolate chip cookies.
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Problem 1-8

John Dough’s bakery in Waxahachie, Texas, specializes in chocolate chip cookies. While John’s business does not yet have a national presence, like Mrs. Fields, he does have a strong statewide reputation. Recently, John has been receiving some out-of-state orders through the company’s website. He is beginning to think about the potential for growing his out-of-state business.

How can managerial accounting information be useful to John as he thinks about growing his out-of-state business?

What decisions might John need to make if he decides to grow his out-of-state business?

What managerial accounting information might John find useful as he decides how to grow his out-of-state business?

Problem 2-21

Bob Jones owns a catering company that stages banquets and parties for both individuals and companies. The business is seasonal, with heavy demand during the summer months and yearend holidays and light demand at other times. Bob has gathered the following cost information from the past year:

 Month Labor Hours Overhead Costs January 2,500 55,000 February 2,800 59,000 March 3,000 60,000 April 4,200 64,000 May 4,500 67,000 June 5,500 71,000 July 6,500 74,000 August 7,500 77,000 September 7,000 75,000 October 4,500 68,000 November 3,100 62,000 December 6,500 73,000 Total 57,600 805,000

Bob recently attended a meeting of the local Chamber of Commerce, at which he heard an accounting professor discuss regression analysis and its business applications. After the

meeting, Bob enlisted the professor’s assistance in preparing a regression analysis of the overhead data he collected. This analysis yielded an estimated fixed cost of \$48,000 per month and a variable cost of \$4 per labor hour. Why do these estimates differ from estimates using the high-low method?

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• Problem 1-8 John Dough’s bakery in Waxahachie, Texas, specializes in chocolate chip cookies.
\$25.00

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Submitted on: 01 Oct, 2017 10:28:26 This tutorial has not been purchased yet .
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