Question
Identify the following behavior of Cost: Monthly production costs in Dilts Company for two levels of...
Identify the following behavior of Cost:
Monthly production costs in Dilts Company for two levels of production are as follows.
|
Cost |
2,000 Units |
4,000 Units |
||||
|
Indirect Labor |
10000 |
20000 |
||||
|
Supervisory Salaries |
5000 |
5000 |
||||
|
Maintenance |
4000 |
6000 |
||||
|
Advertising |
25000 |
25000 |
||||
|
Delivery Worker |
14000 |
16000 |
||||
Homework Answers
Answer #1
The three basic cost behavior patterns are known as variable, fixed, and mixed --
A variable cost describes a cost that varies in total with changes in volume of activity.
A fixed cost describes a cost that is fixed (does not change) in total with changes in volume of activity.
The term mixed cost describes a cost that has a mix of fixed and variable costs.
Table for identified the behaiviour of cost-
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