COST ACCOUNTING
COST BEHAVIORS
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
compute variable cost per unit
|
|
(highest activity-lowest activity) / (highest unit-lowest unit)
|
|
|
(highest activity cost-lowest activity cost ) / (highest unit-lowest unit)
|
|
|
(highest activity cost-lowest activity cost ) / (highest activity unit-lowest activity unit)
|
Explanation:
Detailed explanation-1: -Variable Cost Formula. To calculate variable costs, multiply what it costs to make one unit of your product by the total number of products you’ve created. This formula looks like this: Total Variable Costs = Cost Per Unit x Total Number of Units.
Detailed explanation-2: -The high-low method, as the name indicates, uses two extreme data points to determine the values of a (the fixed cost portion) and b (the variable rate) in the equation Y = a + bX. The extreme data points are the highest representative X − Y pair and the lowest representative X − Y pair.
There is 1 question to complete.