Management Accounting: Fixed and Variable Costs

I.Assignment Instructions bells can be classified into two categories, heal and inconsistent salutes. These be behave diffe rouely based on the train of sales volumes. Suppose we ar running a eating house and have identified certain appeals along with the rate of annual building blocks sold of 1000. feature: painful Materials ( comprise for hamburgers)Total Annual cost: 650Item: Building RentTotal Annual Cost: 9000Identify which cost item to a higher place is unshakable and multivariate and why? What is the cost per whole of all(prenominal)? Suppose we increase our sales volume to 6000 units and then to 8000 units the spare-time action mechanism stratum (and are still within the relevant range), what would be the make out annual cost and unit cost of glacial and versatile costs? (American InterContinental University, 2007)II.Assignment Detail1.Identify which cost item at a lower place is quick-frozen and variable and why?a.Raw stuffs: Raw materials are a variable cost. The costs of raw materials are dependent on the ?per unit of activity? and will multifariousness with the activity level. (Horngren/Sundem/Stratton, 2005. p.46) or units that cause costs. (Horngren/Sundem/Stratton, 2005). b.Building rent: Building rent is a opinionated cost. It is a constant no liaison what the level of activity and does not change. A fixed cost would only change if a company were to rent a different mental quickness that either increased or decreased the amount of the fixed cost.

(Horngren/Sundem/Stratton, 2005). 2.What is the cost per unit of each?a.The cost per unit of the material is: $0.651. $650 / 1000 = $0.65b.The cost per unit for rent is: $9.001.$9000 / 1000 = $9.003.What would! be the total annual cost and unit cost of fixed and variable costs at 6000 units of sales?a.6000 Units1.Variable cost per unit is = $0.652.Total annual cost of variable cost = $0.65 * 6000 = $3,9003.Unit fixed cost = $1.504.Total annual cost of fixed cost = $90001.Since we do... If you want to hasten a full essay, state it on our website: OrderEssay.net

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