I need answers to all parts in this question. Cost DescriptionPossible Measure of Activity1.Salary of production manager at a surfboard manufacturerSurfboards produced2.Cost of solder used in making computersComputers produced3.Cost of dough used at a pizza shopPizzas cooked4.Janitorial wages at a surfboard manufacturerSurfboards produced5.Salary of the controller at a hospitalNumber of patients6.Cost of sales at an electronics storeDollar sales7.Cost of testing materials used in a medical labTests run8.Cost of heating an electronics storeDollar sales9.Cost of electricity for production equipment at a surfboard manufacturerSurfboards produced10.Depreciation on shelving at a book storeDollar salesRequired:For each item above, indicate whether the cost is MAINLY fixed or variable with respect to the possible measure of activity listed next to it. Essay Toolbar navigation opens in a dialog

Answered: For each item above, indicate whether…

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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I need answers to all parts in this question.

	Cost Description	Possible Measure of Activity
1.	Salary of production manager at a surfboard manufacturer	Surfboards produced
2.	Cost of solder used in making computers	Computers produced
3.	Cost of dough used at a pizza shop	Pizzas cooked
4.	Janitorial wages at a surfboard manufacturer	Surfboards produced
5.	Salary of the controller at a hospital	Number of patients
6.	Cost of sales at an electronics store	Dollar sales
7.	Cost of testing materials used in a medical lab	Tests run
8.	Cost of heating an electronics store	Dollar sales
9.	Cost of electricity for production equipment at a surfboard manufacturer	Surfboards produced
10.	Depreciation on shelving at a book store	Dollar sales

Required:

For each item above, indicate whether the cost is MAINLY fixed or variable with respect to the possible measure of activity listed next to it.

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Expert Solution

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The Variable cost are those cost which changes with the change in the output, if there is no output then there is no Variable cost. Higher the Output, higher will be the Variable cost and vice versa

Fixed cost are those cost which doesnt change with the change in output and it remains stable always . Even if there is no output the fixed cost will always remain stable

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