cost which remains constant per unit at various levels of activity is a
a. manufacturing cost
b. Variable cost
c. fixed cost
d. Mixed cost
————————————————-
Two costs at Bradshaw Company appear below for specific months of operation.
|
Month |
Amount |
Units Produced |
|||
|
Delivery costs |
September |
$40,000 |
40,000 |
||
|
October |
55,000 |
60,000 |
|||
|
Utilities |
September |
$84,000 |
40,000 |
||
|
October |
126,000 |
60,000 |
Which type of costs are these?
|
Delivery costs and utilities are both mixed. |
|
Utilities are mixed and delivery costs are variable. |
|
Delivery costs are mixed and utilities are variable. |
|
Delivery costs and utilities are both variable. |
———————————————–
An increase in the level of activity will have the following effects on unit costs for variable and fixed costs:
|
Unit Variable Cost |
Unit Fixed Cost |
|
|
|
|
——————————
Greg’s Breads can produce and sell only one of the following two products:
| Oven | Contribution | ||
| Hours Required | Margin Per Unit | ||
|
Muffins |
0.2 |
$3 |
|
|
Coffee Cakes |
0.3 |
$4 |
The company has oven capacity of 1,200 hours. How much will contribution margin be if it produces only the most profitable product?
|
$24,000 |
|
$12,000 |
|
$16,000 |
|
$18,000 |
