Definition of costs: Step-wise Cost: A Step-wise cost is a cost that does not change steadily with the changes in activity volume. It changes at some point of time. It remains fixed within some volume range and then changes suddenly after a certain point and again remains fixed within that next volume range and again suddenly changes after next volume range, and so on. Variable Cost: A variable cost is the cost that changes at each level and volume of activity changes. It never remains fixed in totality. It increases as the level of output increases and vice versa. It remains fixed per unit of output. Fixed Cost: A Fixed cost is a cost which remains same in totality with the change in activity level. It never remains fixed per unit. Mixed Cost: Mixed cost is a cost which contains both fixed and variable cost components. Curvilinear Cost: Curvilinear cost is a cost that increases at inconsistent rate i.e. irregular cost that increases at different different rates as the level of activity increases. Which graph represents above mentioned cost behavior Identify which graph represents the most suitable cost behavior given in various instances mentioned in question.

Question

Want to see the full answer?

Answer 1

Question

Chapter 21, Problem 1E

To determine

Definition of costs:

Step-wise Cost:

A Step-wise cost is a cost that does not change steadily with the changes in activity volume. It changes at some point of time. It remains fixed within some volume range and then changes suddenly after a certain point and again remains fixed within that next volume range and again suddenly changes after next volume range, and so on.

Variable Cost:

A variable cost is the cost that changes at each level and volume of activity changes. It never remains fixed in totality. It increases as the level of output increases and vice versa. It remains fixed per unit of output.

Fixed Cost:

A Fixed cost is a cost which remains same in totality with the change in activity level. It never remains fixed per unit.

Mixed Cost:

Mixed cost is a cost which contains both fixed and variable cost components.

Curvilinear Cost:

Curvilinear cost is a cost that increases at inconsistent rate i.e. irregular cost that increases at different different rates as the level of activity increases.

Which graph represents above mentioned cost behavior

Identify which graph represents the most suitable cost behavior given in various instances mentioned in question.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

Covered member’s independence is impaired with respect to an attest client. What is a covered member for a CPA? What are the sources of liability for an auditor who violates the rules of professional conduct in an audit engagement?

Monty Inc., a major retailer of high-end office furniture, operates several stores and is a publicly traded company. The company is currently preparing its statement of cash flows. The comparative statement of financial position and income stetement for Monty as at May 31, 2020, are as The rollowing is additional Informacon soous transectons cunne tie year shoes may sa, coat for Monty ancy which tohows arks. Plant assets costing $69,000 were purchased by paying $47,000 in cash and issuing 5,000 common shares. In order to supplement is casn, Monty Issued ,000 edditone common snares. Cash dividends of $35,000 were declared and paid at the end of the fiscal year create cashflow direct method statement

Bonita Industries reports the following ledger account balances at June 30, 2025: Cash $1158 Accounts receivable 2838 Inventory 3384 Prepaid rent 104 Equipment 320 Accumulated depreciation-equipment 66 Accounts payable 920 Unearned rent revenue 144 Common stock 220 Retained earnings 6740 Service revenue 392 Interest revenue 80 Salaries and wages expense 200 Insurance expense 98 Assuming that all of the accounts have normal balances, what are total credits on the company's trial balance at June 30, 2025? A. $8562. B. $8586. C. $8496. D. $8482.