All categories

3 years ago

Which method are managers using when they use their judgment to classify costs as variable

Business

1 answer:

oksian1 [2.3K]3 years ago

5 0

Answer:

Account Analysis

Explanation:

The estimation of different costs associated with the product is know account analysis. In this method the cost is measured into three categories as below

Variable cost
Fixed Cost
Mixed Cost

All these costs are calculated using linear algebra as below

Y= B + MX

where

Y is the total costs of product

B = Fixed Cost of the product

M = Variable cost of the product

X = Number of Units

You might be interested in

A salesperson earns a weekly salary of $600 plus a commission of 1 percent of sales over $2,000. If he earned $650 in a certain

scoundrel [369]

Answer:

$ 7000

Explanation:

Given data;

Weekly salary of the salesperson = $ 600

Commission earned = 1 % on the sales over $ 2000

The amount earned by the salesman in the week = $ 650

Thus, the commission received = $ 650 - $ 600 = $ 50

Now,

let the amount over $ 2000 for which the commission of $ 50 paid be 'x'

therefore,

1 % of x = $ 50

0.01x = $ 50

x = $ 5000

Hence, the total sales was of $ 2000 + $ 5000 = $ 7000

3 0

3 years ago

Markland Manufacturing intends to increase capacity by overcoming a bottleneck operation by adding new equipment. Two vendors ha

MaRussiya [10]

Answer:

10,000 units

Explanation:

Given:

Total fixed costs for proposal A = $50,000

Total fixed costs for proposal B = $70,000

Variable cost for proposal A = $12

Variable cost for proposal B = $10

Revenue generated by each vendor = $20

let the number of units be 'x'

Now,

Cost of proposal A = Cost of proposal B

Fixed cost + x × Variable cost of proposal A = Fixed cost + x × Variable cost of proposal B

$50,000 + x × $12 = $70,000 + x × $10

x × $12 - x × $10 = $70,000 - $50,000

x × $2 = $20,000

x = 10,000 units

7 0

3 years ago

Read 2 more answers

Indicate how each of the following would shift the (1) marginal-cost curve, (2) average-variable-cost curve, (3) average-fixed-c

DerKrebs [107]

Answer:

a. A reduction in business property taxes. Fixed cost.

Marginal cost curve = No change

Average variable cost curve = No change

Average-fixed-cost curve = Shift down

Average-total-cost curve = Shift down

b. An increase in the nominal wages of production workers is a Variable cost.

Marginal cost curve = Shift up

Average variable cost curve = Shift up

Average-fixed-cost curve = No change

Average-total-cost curve = Shift up

c. A decrease in the price of electricity (Variable cost)

Marginal cost curve = Shift down

Average variable cost curve = Shift down

Average-fixed-cost curve = No change

Average-total-cost curve = Shift down

d. An increase in insurance rates on plant and equipment. (Fixed cost)

Marginal cost curve = No change

Average variable cost curve = No change

Average-fixed-cost curve = Shift up

Average-total-cost curve = Shift up

e. An increase in transportation costs. (Variable cost)

Marginal cost curve = Shift up

Average variable cost curve = Shift up

Average-fixed-cost curve = No change

Average-total-cost curve = Shift up

Explanation:

6 0

3 years ago

On January 2, Boulder Co. assigned its patent to Castle Co. for royalties of 10% of patent-related sales. The assignment is for

Tema [17]

Answer:

$30,000

Explanation:

The computation of the royalty revenue reported is shown below:

= Patent-related sales for the year × given percentage

= $300,000 × 10%

= $30,000

The revenue is recognized when it is earned or realized so only $30,000 is to be reported as the royalty revenue

The remaining amount i.e $20,000 would be treated as an unearned royalty revenue

6 0

3 years ago

Which of the following statements is true of entrepreneurs?

Sindrei [870]

The answer is <u>"B. Entrepreneurs often work long hours and must take on the financial responsibilities of the business."</u>

An entrepreneur is a person who, as opposed to functioning as a worker, establishes and maintains a private company, expecting every one of the dangers and prizes of the endeavor. The business visionary is generally observed as a pioneer, a wellspring of new thoughts, merchandise, administrations and business/or techniques.

Entrepreneurs assume a key role in any economy. These are the general population who have the right stuff and activity important to foresee present and future needs and put up great new thoughts for sale to the public.

8 0

3 years ago

Read 2 more answers

Which method are managers using when they use their judgment to classify costs as​ variable

Which method are managers using when they use their judgment to classify costs as variable