1)This discussion is designed to get you to see the behavior of costs in companies with which they are familiar. You

Question

1)This discussion is designed to get you to see the behavior of costs in companies with which they are familiar. You should identify and describe the company. Then, identify three different costs that behave differently. You should identify at least one fixed cost, variable cost and mixed cost and be able to justify their selections. Think of a company with which you are familiar. Describe the company and their primary product(s)/service(s). Identify a fixed cost, a variable cost, and a mixed cost that company would incur and explain how you determined that those costs would fit those behavior patterns. 2)From the following information of NaNo Company prepare a multi-step income statement For the Year Ended December 31, 2019 (2 marks) Sales $137,460 Sales Returns $2,060 Sales Discounts $5,190 Cost of Goods Sold $62,990 Freight-Out $6,150 Advertising Expense $5,790 Sales Commissions Expense $3,470 Office Salaries Expense $18,510 Office Rent Expense $14,000 Office Supplies Expense

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1)Company - FMC (Fresenius Medical Care) Primary Prduct - Haemodialysis Machines Fixed Cost - Rental expense for their production facility. Rental expense is a fixed contract for multiple years. The amount remains constant, it does not increase/decrease with the number of machines being manufactured. Variable Costs - Per unit manufacturing cost of the Heamodialysis machines HD machines production cost is variable. The more number of machines that the company produces, the more will be the total cost and vice-versa. It is increasing with increase in production, hence, the behavior is variable. Mixed Cost - Insurance for the workers is mixed cost The basic premium is fixed for the workers. In case of additions in the workforce, the premium keeps increasing. So, a part of it is fixed, the other part is variable based on the number of workers. The behaviour is mixed. 2) Multi- Step income statement Sales $137,460 Less: Sales discount ($5,190) Sales return and Allowances ($2,060) Freight out ($6,150) Net sales $124,060 Less: Cost of goods sold ($62,990) Gross profit $61,070 Expenses: Selling expenses Sales commission Expense $3,470 Advertising expenses $5,790 Total selling expenses $9,260 General and administrative expenses Office salaries expense $18,510 Office rent Expense $14,000 Office supplies expense $5,330 Total general and administrative expenses $37,840 Total expenses $47,100 $13,970 Other revenue, Gain, expenses and losses Gain on sale of Equipment $2,430 Loss on sale

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1)This discussion is designed to get you to see the behavior of costs in companies with which they are familiar

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Archived Solution

Sales	$137,460
Less: Sales discount	($5,190)
Sales return and Allowances	($2,060)
Freight out	($6,150)
Net sales		$124,060
Less: Cost of goods sold		($62,990)
Gross profit		$61,070
Expenses:
Selling expenses
Sales commission Expense	$3,470
Advertising expenses	$5,790
Total selling expenses		$9,260
General and administrative expenses
Office salaries expense	$18,510
Office rent Expense	$14,000
Office supplies expense	$5,330
Total general and administrative expenses		$37,840
Total expenses		$47,100
		$13,970
Other revenue, Gain, expenses and losses
Gain on sale of Equipment	$2,430
Loss on sale of investment	($1,640)
Interest expense	($930)
Total other revenue, gain, expenses and losses		($140)
Net income		$13,830