The standard price and quantity of fuel are $1.60 per gallon purchased and 1.25 gallons consumed per gallon sold, respectively. The actual price of fuel was $2 per gallon and the actual quantity of fuel consumed was 32,500 gallons. Actual fuel purchases were 35,000 gallons. Compute the purchase price, price and quantity variances for fuel. Label variances as favorable or unfavorable.

Q: Define cost behaviour.

A: High-Low Method: The high-low method is the method by which the variable component and the fixed…

Q: Define the term transportation costs.

A: Cost: Cost is that amount which is paid to get something from the any supplier and the amount which…

Q: Why do engineers need cost data?

A: The question is based on the concept of cost in engineering projects.

Q: What is a component cost?

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Q: How can we determine the operating margin?

A: Operating margin refers to percentage of net operating income over the sales of the company.

Q: Define the term Cost approaches.

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Q: What is a standard cost? Explain? Give an example?

A: Standard Cost: Standard cost is the benchmark amount of per unit product, per unit input or per unit…

Q: Describe the concept of an equivalent unit and how to compute equivalent units

A:

Q: What does the Unit contribution margin express?

A: Break Even Point:                 Break Even Point is defined as the level where there is no profit…

Q: Explain the arguments for and against using historical cost as a measurement base.

A: Historical Cost Accounting is a method of accounting in which the assets in the balance sheet are…

Q: What is cost management?

A: Cost: The amount paid to purchase the asset, install it, and put it into operations, is referred to…

Q: What is the equation to find Contribution Margin?

A: Contribution margin:   Contribution margin refers to the process or theory that is used to judge the…