ACC Week 6 Check Point

ACC Week 6 Check Point - activity level is. A Mixed cost is...

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ACC / 120 Check Point – Cost, Volume, and Profit Questions Question 1 Indirect Labor is a variable cost because the cost varies in total directly and proportionately with changes in the activity level. It does increase from 10,000 to 20,000 as well. Supervisory Salaries is a Fixed Cost because it is a salary cost. Salaries remain the same throughout the year no matter what the activity level is. Maintenance is going to be a mixed cost because the cost contains both a variable and a fixed element. The mixed cost can change in total but not in proportionately with changes in the activity levels. Question 2 A variable cost is a cost that varies in total directly and proportionately with changes in the activity level. A fixed cost is a cost that remains the same throughout the year no matter what the
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Unformatted text preview: activity level is. A Mixed cost is a cost that contains both a variable and a fixed element. It can change in total but not in proportionately with changes in the activity levels. Question 3 A CVP income statement is a Cost-Volume-Profit Income Statement. This is the study of the effects of changes in the cost and volume of a companys profits. It is important to management because it has setting selling prices, determining products mix, and maximizing use of production facilities. There are five basic components that CVP analysis considers with the interrelationships among the components. Volume or level of activity, units selling prices, variable cost per unit, total fixed cost and sales mix are the five basic components....
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This note was uploaded on 12/20/2011 for the course ACC 220 taught by Professor - during the Spring '10 term at University of Phoenix.

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