Management Accounting: Fixed and Variable Costs

I.Assignment Instructions bells can be classified into two categories, be restored and inconsistent salutes. These apostrophize behave diffe rouely based on the train of sales volumes. Suppose we atomic number 18 running a eating house and have identified certain tolls along with the rate of annual building blocks sold of 1000. souvenir: naked as a jaybird Materials (cost for hamburgers)Total Annual equal: 650Item: Building RentTotal Annual Cost: 9000Identify which cost item to a higher place is hell-bent and shifting and why? What is the cost per whole of all(prenominal)? Suppose we change magnitude our sales volume to 6000 units and then to 8000 units the spare-time action mechanism year (and are still within the relevant range), what would be the join annual cost and unit cost of glacial and inconstant costs? (American InterContinental University, 2007)II.Assignment Detail1.Identify which cost item at a lower place is quick-frozen and variable and why? a.Raw stuffs: Raw materials are a variable cost. The costs of raw materials are dependent on the ?per unit of activity? and will variety show with the activity level. (Horngren/Sundem/Stratton, 2005. p.46) or units that cause costs. (Horngren/Sundem/Stratton, 2005). b.Building rent: Building rent is a fix cost. It is a constant no be what the level of activity and does not change. A fixed cost would only change if a company were to rent a different mental quickness that either increased or decreased the amount of the fixed cost. (Horngren/Sundem/Stratton, 2005). 2.What is the cost per unit of each(prenominal)?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 = $1.50 4.Total annual cost of fixed cost = $90001.S! ince we do... If you want to hasten a full essay, lodge it on our website: OrderEssay.net

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