### Problems1. **What type of cost behavior (fixed, variable, or mixed) is displayed in each of the following?** - **Volume 6000, 7000** **Cost $34,500, $34,500** ____________________________________ - **Volume 5000, 6000** **Cost $20,000, $24,000** ____________________________________ - **Volume 2500, 4500** **Cost $12,000, $18,000** ____________________________________2. **Compute the Magnitude of Operating Leverage for the following company:** - **Sales**: $900,000 - **Variable Costs**: ($780,000) - **Contribution Margin**: $120,000 - **Fixed Costs**: ($60,000) - **Income from Operations**: $60,000

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1. What type of cost behavior (fixed, variable, or mixed) is displayed in each of the following? Volume 6000 7000 Cost $34,500 $34,500 Volume 5000 6000 Cost $20,000 $24,000 Volume 2500 4500 Cost $12,000 $18,000

1. What type of cost behavior (fixed, variable, or mixed) is displayed in each of the following? Volume 6000 7000 Cost $34,500 $34,500 Volume 5000 6000 Cost $20,000 $24,000 Volume 2500 4500 Cost $12,000 $18,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Manufacturing Costs

Manufacturing cost is the total cost of procuring or producing a product. In other words, the manufacturing cost is the cost that an individual or business owner undertakes for the manufacturing of goods.

Question

### Problems

1. **What type of cost behavior (fixed, variable, or mixed) is displayed in each of the following?**

- **Volume 6000, 7000**
**Cost $34,500, $34,500**
____________________________________

- **Volume 5000, 6000**
**Cost $20,000, $24,000**
____________________________________

- **Volume 2500, 4500**
**Cost $12,000, $18,000**
____________________________________

2. **Compute the Magnitude of Operating Leverage for the following company:**

- **Sales**: $900,000
- **Variable Costs**: ($780,000)
- **Contribution Margin**: $120,000
- **Fixed Costs**: ($60,000)
- **Income from Operations**: $60,000

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