a. What problems are associated with using the average cost per unit as a performance measure? b. What problems are associated with using the variable cost per unit as a performance measure?

Q: How does the variable cost per unit change as the level of activity (or cost driver) increases? Why?

A: A variable cost changes is directly proportional to the change in the level of activity or cost…

Q: Define opportunity costs and explain why they represent acommon source of error in making cost…

A:

Q: Explain the difference between total variable costs and variable costs per unit.

A: Cost can be categorized as variable and fixed costs.

Q: What would be the outputs for the given assumptions:   Total revenue: Total costs: Total profit:

A: Break Even Point is that point at which there is no profit & loss would arise. At break even…

Q: Why is there a need to separate mixed cost as to variable & fixed cost?

A: Variable cost: these are the costs which vary with the units produced. These costs increase by…

Q: A total cost equation can be used to predict future costs for various activity levels. Write the…

A: Concept The total cost is the sum of variable cost and fixed cost incurred For example if variable…

Q: What effect do minor deviations from the EOQ have on totalinventory cost?

A: Minor variations from the EOQ will not in general highly affect the total inventory cost except if…

Q: What is variable costing? How does it differ from absorpotion costing? Which can better be used to…

A: Variable Costing is a costing method where variable expenses change in proportion with production.…

Q: Explain the difference between fixed cost and variable cost? Support your answer with examples

A: Cost:   It is the economic value of resources incurred by a firm to manufacture a product or render…

Q: What is the economic rationale for the cost approach? Under what conditions would the cost approach…

A: Answer: Economic rationale for cost approach: The cost approach means that the person who is…

Q: Is there a difference between relevant costs and incremental costs? Explain

A: Relevant cost: Relevant cost is the cost which is relevant in decision making of a project, and…

Q: what are the differences between the FIFO, LIFO, and the average cost?

A: Inventory: It refers to the items held by an organization which were in various forms like raw…

Q: iable costs in the context of cost-volume-profit (CPV) analysis?  b. Fixed costs in the context of…

A: Cost volume profit analysis is very important for the companies because it tells them that whether…

Q: In a decision analysis situation, which one of the following costs is generally not relevant to the…

A: Relevant cost is the cost that is different between different alternatives. This cost is considered…

Q: he total mixed cost function

A: Mixed cost is a cost that contains both fixed and variable cost.Mixed cost algebric formula is as…

Q: Why is it necessary to distinguish between variable and fixed costs when dealing with mixed costs

A: Introduction:- Every Business expenses are classified as either fixed or variable costs. on other…

Q: What is the difference between a linear and a nonlinear cost function? Give an example of each type…

A: Cost Function:Cost function represents the basic change comes in the total cost due to the change in…

Q: n a decision analysis situation, which one of the following costs is generally not relevant to the…

A: Decision making is the process used to choose one of the various available alternatives. Examples of…

Q: COSTING METHOD. 1. What is average cost method? 2. What is FIFO cost method?

A: Solution: 1.   Average cost method: Average cost method is also known as weighted average method.…

Q: Types of Fixed and Variable cost with the help of example and graph?

A: Costs are the total spent amount for the expenditures and for producing the goods and services.…

Q: What is interpretation of the usefulness of the contribution margin concept?

A: Contribution margin The additional profit gained for each unit sold is calculated by subtracting the…

Q: What are the two components that can affect the contribution margin? Why is it important to…

A: The two components that can affect contribution margin: 1) Number of units sold. 2) Price / cost per…

Q: In the cost behavior equation, b*X denotes the variable cost per unit. Select one: O True O False

A: Cost behavior serves as an indicator of how a cost will vary overall when an activity is changed.…

Q: a. What problems are associated with using the average cost per unit as a performance measure? b.…

A: Cost Accounting: It is the process of collecting, recording, analyzing the cost, summarizing cost,…