Activity level is defined as how an activity is used by a cost object / other activity. Different activity often has different cost drivers. The five levels of activities are unit-level activities, batch-level activities, customer-level activities, production level activities and organization sustaining activities. Maximum contribution at a particular level of activity will show the maximum profitability position. To explain: The effect of an increase in activity level on average fixed costs per unit.

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Answer 1

Question

Chapter 1, Problem 5Q

a.

To determine

Concept Introduction:

Activity level is defined as how an activity is used by a cost object / other activity. Different activity often has different cost drivers. The five levels of activities are unit-level activities, batch-level activities, customer-level activities, production level activities and organization sustaining activities. Maximum contribution at a particular level of activity will show the maximum profitability position.

To explain: The effect of an increase in activity level on average fixed costs per unit.

b.

To determine

Concept Introduction:

Activity level is defined as how an activity is used by a cost object / other activity. Different activity often has different cost drivers. The five levels of activities are unit-level activities, batch-level activities, customer-level activities, production level activities and organization sustaining activities. Maximum contribution at a particular level of activity will show the maximum profitability position.

To explain: The effect of an increase in activity level on variable costs per unit.

c.

To determine

Concept Introduction:

Activity level is defined as how an activity is used by a cost object / other activity. Different activity often has different cost drivers. The five levels of activities are unit-level activities, batch-level activities, customer-level activities, production level activities and organization sustaining activities. Maximum contribution at a particular level of activity will show the maximum profitability position.

To explain: The effect of an increase in activity level on total fixed costs.

d.

To determine

Concept Introduction:

Activity level is defined as how an activity is used by a cost object / other activity. Different activity often has different cost drivers. The five levels of activities are unit-level activities, batch-level activities, customer-level activities, production level activities and organization sustaining activities. Maximum contribution at a particular level of activity will show the maximum profitability position.

To explain: The effect of an increase in activity level on total variable costs.

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Students have asked these similar questions

What effect does an increase in the activity level have on— a. Unit fixed costs? b. Unit variable costs? c. Total fixed costs? d. Total variable costs?

What is the effect of an increase in activity on the followingitems?a. Total variable costs.b. Variable costs per unit of activity.c. Total fixed costs.d. Fixed costs per unit of activity.

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

Answer 2

Question

Chapter 1, Problem 5Q

a.

To determine

Concept Introduction:

Activity level is defined as how an activity is used by a cost object / other activity. Different activity often has different cost drivers. The five levels of activities are unit-level activities, batch-level activities, customer-level activities, production level activities and organization sustaining activities. Maximum contribution at a particular level of activity will show the maximum profitability position.

To explain: The effect of an increase in activity level on average fixed costs per unit.

b.

To determine

Concept Introduction:

Activity level is defined as how an activity is used by a cost object / other activity. Different activity often has different cost drivers. The five levels of activities are unit-level activities, batch-level activities, customer-level activities, production level activities and organization sustaining activities. Maximum contribution at a particular level of activity will show the maximum profitability position.

To explain: The effect of an increase in activity level on variable costs per unit.

c.

To determine

Concept Introduction:

Activity level is defined as how an activity is used by a cost object / other activity. Different activity often has different cost drivers. The five levels of activities are unit-level activities, batch-level activities, customer-level activities, production level activities and organization sustaining activities. Maximum contribution at a particular level of activity will show the maximum profitability position.

To explain: The effect of an increase in activity level on total fixed costs.

d.

To determine

Concept Introduction:

Activity level is defined as how an activity is used by a cost object / other activity. Different activity often has different cost drivers. The five levels of activities are unit-level activities, batch-level activities, customer-level activities, production level activities and organization sustaining activities. Maximum contribution at a particular level of activity will show the maximum profitability position.

To explain: The effect of an increase in activity level on total variable costs.

Expert Solution & Answer

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Answer 3

Question

Chapter 1, Problem 5Q

a.

To determine

Concept Introduction:

Activity level is defined as how an activity is used by a cost object / other activity. Different activity often has different cost drivers. The five levels of activities are unit-level activities, batch-level activities, customer-level activities, production level activities and organization sustaining activities. Maximum contribution at a particular level of activity will show the maximum profitability position.

To explain: The effect of an increase in activity level on average fixed costs per unit.

b.

To determine

Concept Introduction:

Activity level is defined as how an activity is used by a cost object / other activity. Different activity often has different cost drivers. The five levels of activities are unit-level activities, batch-level activities, customer-level activities, production level activities and organization sustaining activities. Maximum contribution at a particular level of activity will show the maximum profitability position.

To explain: The effect of an increase in activity level on variable costs per unit.

c.

To determine

Concept Introduction:

Activity level is defined as how an activity is used by a cost object / other activity. Different activity often has different cost drivers. The five levels of activities are unit-level activities, batch-level activities, customer-level activities, production level activities and organization sustaining activities. Maximum contribution at a particular level of activity will show the maximum profitability position.

To explain: The effect of an increase in activity level on total fixed costs.

d.

To determine

Concept Introduction:

Activity level is defined as how an activity is used by a cost object / other activity. Different activity often has different cost drivers. The five levels of activities are unit-level activities, batch-level activities, customer-level activities, production level activities and organization sustaining activities. Maximum contribution at a particular level of activity will show the maximum profitability position.

To explain: The effect of an increase in activity level on total variable costs.

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Answer 4

Question

Chapter 1, Problem 5Q

a.

To determine

Concept Introduction:

Activity level is defined as how an activity is used by a cost object / other activity. Different activity often has different cost drivers. The five levels of activities are unit-level activities, batch-level activities, customer-level activities, production level activities and organization sustaining activities. Maximum contribution at a particular level of activity will show the maximum profitability position.

To explain: The effect of an increase in activity level on average fixed costs per unit.

b.

To determine

Concept Introduction:

Activity level is defined as how an activity is used by a cost object / other activity. Different activity often has different cost drivers. The five levels of activities are unit-level activities, batch-level activities, customer-level activities, production level activities and organization sustaining activities. Maximum contribution at a particular level of activity will show the maximum profitability position.

To explain: The effect of an increase in activity level on variable costs per unit.

c.

To determine

Concept Introduction:

Activity level is defined as how an activity is used by a cost object / other activity. Different activity often has different cost drivers. The five levels of activities are unit-level activities, batch-level activities, customer-level activities, production level activities and organization sustaining activities. Maximum contribution at a particular level of activity will show the maximum profitability position.

To explain: The effect of an increase in activity level on total fixed costs.

d.

To determine

Concept Introduction:

Activity level is defined as how an activity is used by a cost object / other activity. Different activity often has different cost drivers. The five levels of activities are unit-level activities, batch-level activities, customer-level activities, production level activities and organization sustaining activities. Maximum contribution at a particular level of activity will show the maximum profitability position.

To explain: The effect of an increase in activity level on total variable costs.

Expert Solution & Answer

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Answer 5

Chapter 1, Problem 5Q

a.

To determine

Concept Introduction:

Activity level is defined as how an activity is used by a cost object / other activity. Different activity often has different cost drivers. The five levels of activities are unit-level activities, batch-level activities, customer-level activities, production level activities and organization sustaining activities. Maximum contribution at a particular level of activity will show the maximum profitability position.

To explain: The effect of an increase in activity level on average fixed costs per unit.

b.

To determine

Concept Introduction:

Activity level is defined as how an activity is used by a cost object / other activity. Different activity often has different cost drivers. The five levels of activities are unit-level activities, batch-level activities, customer-level activities, production level activities and organization sustaining activities. Maximum contribution at a particular level of activity will show the maximum profitability position.

To explain: The effect of an increase in activity level on variable costs per unit.

c.

To determine

Concept Introduction:

Activity level is defined as how an activity is used by a cost object / other activity. Different activity often has different cost drivers. The five levels of activities are unit-level activities, batch-level activities, customer-level activities, production level activities and organization sustaining activities. Maximum contribution at a particular level of activity will show the maximum profitability position.

To explain: The effect of an increase in activity level on total fixed costs.

d.

To determine

Concept Introduction:

Activity level is defined as how an activity is used by a cost object / other activity. Different activity often has different cost drivers. The five levels of activities are unit-level activities, batch-level activities, customer-level activities, production level activities and organization sustaining activities. Maximum contribution at a particular level of activity will show the maximum profitability position.

To explain: The effect of an increase in activity level on total variable costs.

Answer 6

Chapter 1, Problem 5Q

a.

To determine

Concept Introduction:

Activity level is defined as how an activity is used by a cost object / other activity. Different activity often has different cost drivers. The five levels of activities are unit-level activities, batch-level activities, customer-level activities, production level activities and organization sustaining activities. Maximum contribution at a particular level of activity will show the maximum profitability position.

To explain: The effect of an increase in activity level on average fixed costs per unit.

Answer 7

Chapter 1, Problem 5Q

a.

To determine

Concept Introduction:

Activity level is defined as how an activity is used by a cost object / other activity. Different activity often has different cost drivers. The five levels of activities are unit-level activities, batch-level activities, customer-level activities, production level activities and organization sustaining activities. Maximum contribution at a particular level of activity will show the maximum profitability position.

To explain: The effect of an increase in activity level on average fixed costs per unit.

Answer 8

b.

To determine

Concept Introduction:

Activity level is defined as how an activity is used by a cost object / other activity. Different activity often has different cost drivers. The five levels of activities are unit-level activities, batch-level activities, customer-level activities, production level activities and organization sustaining activities. Maximum contribution at a particular level of activity will show the maximum profitability position.

To explain: The effect of an increase in activity level on variable costs per unit.

Answer 9

b.

To determine

Concept Introduction:

Activity level is defined as how an activity is used by a cost object / other activity. Different activity often has different cost drivers. The five levels of activities are unit-level activities, batch-level activities, customer-level activities, production level activities and organization sustaining activities. Maximum contribution at a particular level of activity will show the maximum profitability position.

To explain: The effect of an increase in activity level on variable costs per unit.

Answer 10

c.

To determine

Concept Introduction:

Activity level is defined as how an activity is used by a cost object / other activity. Different activity often has different cost drivers. The five levels of activities are unit-level activities, batch-level activities, customer-level activities, production level activities and organization sustaining activities. Maximum contribution at a particular level of activity will show the maximum profitability position.

To explain: The effect of an increase in activity level on total fixed costs.

Answer 11

c.

To determine

Concept Introduction:

Activity level is defined as how an activity is used by a cost object / other activity. Different activity often has different cost drivers. The five levels of activities are unit-level activities, batch-level activities, customer-level activities, production level activities and organization sustaining activities. Maximum contribution at a particular level of activity will show the maximum profitability position.

To explain: The effect of an increase in activity level on total fixed costs.

Answer 12

d.

To determine

Concept Introduction:

Activity level is defined as how an activity is used by a cost object / other activity. Different activity often has different cost drivers. The five levels of activities are unit-level activities, batch-level activities, customer-level activities, production level activities and organization sustaining activities. Maximum contribution at a particular level of activity will show the maximum profitability position.

To explain: The effect of an increase in activity level on total variable costs.

Answer 13

d.

To determine

Concept Introduction:

Activity level is defined as how an activity is used by a cost object / other activity. Different activity often has different cost drivers. The five levels of activities are unit-level activities, batch-level activities, customer-level activities, production level activities and organization sustaining activities. Maximum contribution at a particular level of activity will show the maximum profitability position.

To explain: The effect of an increase in activity level on total variable costs.

Answer 14

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Answer 15

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Answer 16

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Answer 17

Ch. 1 - Prob. 1Q Ch. 1 - Define the following: (a) direct materials, (b)...Ch. 1 - Explain the difference between a product cost and...Ch. 1 - Distinguish between (a) a variable cost, (b) a...Ch. 1 - Prob. 5Q Ch. 1 - Define the following terms: (a) cost behavior and...Ch. 1 - What is meant by an activity base when dealing...Ch. 1 - Prob. 8Q Ch. 1 - Distinguish between discretionary fixed costs and...Ch. 1 - Does the concept of the relevant range apply to...

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Chapter 1 Solutions