
Concept explainers
Introduction:
Fixed and variable costs:
Fixed costs are non inventoriable costs that remains fixed irrespective of change in activity volumes or production. The cost is constant and there is no fluctuation in the total cost due to increase or decrease in outputs. Indirect costs and factory
Variable costs are inventoriable costs that fluctuates with the activity volume or production. The cost varies with the level of change in activity volume or production. Increase in activity or production leads to increase in total costs and decreased activity or production leads to reduction in total costs. Variable costs are helpful in decision-making process by managers in production process.
Requirement-1:
To calculate:
The total cost for the usage of talks and text messages sent by sister under Plan A and Plan B offered by the company based on their fixed and variable costs.
Requirement-2:
To calculate:
The total cost for the usage of talks and text messages sent by sister under Plan A and Plan B offered by the company based on their fixed and variable costs.

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Chapter 18 Solutions
Connect Access Card for Fundamental Accounting Principles
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