### 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

As per our guidelines, we are supposed to answer only one question(if multiple questions asked)…

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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