COST ACCT-W/ACCESS >C< NON-MAJORS
COST ACCT-W/ACCESS >C< NON-MAJORS
15th Edition
ISBN: 9781269768191
Author: Horngren
Publisher: PEARSON C
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Chapter 11, Problem 11.18E

1.

To determine

Operating Income:

The outcome after deduction of operating expense and depreciation from the gross income is called as operating income. The operating income realized before any payment pertaining to interest and taxes payable.

Operating income.

2.

To determine

Opportunity Cost:

Opportunity cost is total of potential income and other benefits that are lost due to rejection of alternatives. These costs are considered to evaluate the multiple project or options available.

Variable Cost:

The variable cost is that cost which varies with increase or decrease in the level of production. The variable cost of per unit remains same. It can be said that variable cost has the positive relationship with output of production.

Fixed Cost:

The fixed cost is that cost which does not change with increase or decrease in the level of the production, but per unit fixed changes with change in the level production. Examples of the fixed cost are rent, wages and insurance.

The amount of relevant cost saved by using released facilities.

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