Chapter 2 Solutions.

1459 Words May 28th, 2013 6 Pages
CHAPTER 2
AN INTRODUCTION TO COST TERMS AND PURPOSES

2-20 (15–20 min.) Classification of costs, manufacturing sector.

Cost object: Type of car assembled (Corolla or Geo Prism)
Cost variability: With respect to changes in the number of cars assembled There may be some debate over classifications of individual items, especially with regard to cost variability.

|Cost Item |D or I |V or F |
|A |D |V |
|B |I |F |
|C |D |F
…show more content…
Number of attendees 0 100 200 300 400 500 600
Variable cost per person ($10 caterer charge – $5 student door fee) $5 $5 $5 $5 $5 $5 $5
Fixed Costs $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500
Variable costs (number of attendees x variable cost per person) 0 500 1,000 1,500 2,000 2,500 3,000
Total costs (fixed + variable) $1,500 $2,000 $2,500 $3,000 $3,500 $4,000 $4,500

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2.
|Number of attendees |0 |100 |200 |300 |400 |500 |600 |
|Total costs |$1,500 |$2,000 |$2,500 |$3,000 |$3,500 |$4,000 |$4,500 |
|(fixed + variable) | | | | | | | |
|Costs per attendee (total costs[pic]number| | $20.00 |$12.50 | $10.00 |$ 8.75 |$ 8.00 |$ 7.50 |
|of attendees) | | | | | | | |

As shown in the table above, for 100 attendees the total cost will be $2,000 and the cost per attendee will be $20.

3. As shown in the table in requirement 2, for 500 attendees the total cost will be $4,000 and the cost per attendee will be $8.

4.