The following extract is taken from the production cost budget of S Co. Production (units) 2,000 3,000 Production cost ($) 11,100 12,900 What is the budget cost allowance for an activity level of 4,000 units?
A、$7,200
B、$7,500
C、$13,460
D、$14,700
A、$7,200
B、$7,500
C、$13,460
D、$14,700
【参考答案及解析】
Units $ High activity 3,000 12,900 Low activity 2,000 11,100 Increase 1,000 1,800 Variable cost per unit =$1,800/1,000=$1.80 per unit Fixed cost, substituting in high activity = $12,900 - (3,000 x $1.80) =$7,500 Budget cost allowance for 4,000 units: $ Variable cost (4,000 x $1.80) 7,200 Fixed cost 7,500 14,700 Option A is the variable cost allowance only and option B is the fixed cost allowance only. If you selected option C your variable cost per unit calculation was upside down ($1,000/1,800 instead of $1,800/1,000
Units $ High activity 3,000 12,900 Low activity 2,000 11,100 Increase 1,000 1,800 Variable cost per unit =$1,800/1,000=$1.80 per unit Fixed cost, substituting in high activity = $12,900 - (3,000 x $1.80) =$7,500 Budget cost allowance for 4,000 units: $ Variable cost (4,000 x $1.80) 7,200 Fixed cost 7,500 14,700 Option A is the variable cost allowance only and option B is the fixed cost allowance only. If you selected option C your variable cost per unit calculation was upside down ($1,000/1,800 instead of $1,800/1,000