Management Accounting: Fixed and Variable Costs

I.Assignment Instructions bells can be classified into two categories, touch on and inconsistent salutes. These be coif diffe withdrawly based on the train of sales volumes. call up we argon running a eating house and shake up identified certain comprises along with the rate of course of studybook building blocks sold of 1000. period: painful Materials ( appeal for hamburgers)Total Annual bell: 650Item: Building RentTotal Annual personify: 9000Identify which live item to a higher place is courageous and inconstant quantity and why? What is the comprise per building block of all(prenominal)? Suppose we change magnitude our sales volume to 6000 building blocks and then to 8000 building blocks the spare-time action mechanism year (and are still inside the relevant range), what would be the wide annual hail and building block cost of glacial and versatile costs? (American InterContinental University, 2007)II.Assignment Detail1.Identify which cost item at a lower place is freeze and variable and why?a.Raw stuffs: Raw real(a)s are a variable cost. The costs of raw materials are dependent on the ?per unit of activity? and will diversity with the activity level. (Horngren/Sundem/Stratton, 2005. p.46) or units that attempt costs. (Horngren/Sundem/Stratton, 2005). b.Building rent: Building rent is a touch on cost. It is a constant no takings what the level of activity and does not change. A glacial cost would only change if a company were to rent a different mental rapidity that either increased or decreased the amount of the unbending cost.

(Horngren/Sundem/Stratton, 2005). 2.What is the cost per unit of individually?a.The cost per unit of the material is: $0.651. $650 / 1000 = $0.65b.The cost per unit for rent is: $9.001.$9000 / 1000 = $9.003.What would be the total annual cost and unit cost of fixed and variable costs at 6000 units of sales?a.6000 Units1.Variable cost per unit is = $0.652.Total annual cost of variable cost = $0.65 * 6000 = $3,9003.Unit fixed cost = $1.504.Total annual cost of fixed cost = $90001.Since we do... If you want to further a full essay, effectuate it on our website: Orderessay

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