Answered: The graph of a variable cost when…

The graph of a variable cost when plotted against its related activity base appears as a a.circle b.straight line c.rectangle d.curved line

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter2: Building Blocks Of Managerial Accounting

Section: Chapter Questions

Problem 18MC: A scatter graph is used to test the assumption that the relationship between cost and activity level...

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Concept explainers

Manufacturing Costs

Manufacturing cost is the total cost of procuring or producing a product. In other words, the manufacturing cost is the cost that an individual or business owner undertakes for the manufacturing of goods.

Question

The graph of a variable cost when plotted against its related activity base appears as a

a.circle

b.straight line

c.rectangle

d.curved line

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Which of the following graphs best illustrates fixed costs per unit as the activity base changes?
Describe how total variable costs and unit variable costs behave with changes in the level of activity.
Explain how a scatter graph is used to identify and measure cost behavior.
Examine the graphs in Exercise 3-40. Required: As explained in the chapter, cost behavior patterns can be described as fixed, variable, semi-variable, mixed, or step function (i.e., semi-fixed) in nature. Explain the exact type of cost behavior pattern represented by each of the cost curves shown in graphs A through L. Note that some of the graphs might represent a combination of multiple cost behavior patterns.
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