ACCOUNTING PRCINCIPLES (CCCS CUSTOM)
ACCOUNTING PRCINCIPLES (CCCS CUSTOM)
14th Edition
ISBN: 9781119845102
Author: Weygandt
Publisher: WILEY
Question
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Chapter 22, Problem 2Q

(a)

To determine

Variable Cost: This cost is directly proportional to the level of output produced, it increase with increase in output and vice versa.

Activity Index: The cost tends to change with the change in production and also the other variables. This cost changing behavior is denoted by the activity index.

To explain: Meaning and importance of activity index.

(b)

To determine

To explain: Two ways to define variable cost.

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