BuyFindarrow_forward

Accounting

27th Edition
WARREN + 5 others
ISBN: 9781337272094

Solutions

Chapter
Section
BuyFindarrow_forward

Accounting

27th Edition
WARREN + 5 others
ISBN: 9781337272094
Textbook Problem

How would the following costs be classified (variable or fixed) if units produced was the activity base?

  1. a. Direct materials costs
  2. b. Electricity costs of $0.35 per kilowatt-hour

To determine

Variable costs: These are the costs that proportionately change with the changes in the activity base such as units of production Common examples of variable costs are direct materials and direct labor costs.

Fixed Costs: These are the costs that remain constant in total dollar amount irrespective to the changes in the activity base such as units of production. Common examples of fixed costs are factory overhead costs and straight-line depreciation expenses.

To classify: the given costs as variable cost or fixed cost if the activity base is units produced.

Explanation

Classify the given costs as variable cost or fixed cost if the activity base is units produced.

The activities that cause the cost to vary accordingly are known as activity base.

a.

Direct Material cost is a variable cost...

Still sussing out bartleby?

Check out a sample textbook solution.

See a sample solution

The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started

Additional Business Solutions

Find more solutions based on key concepts

Show solutions add

Why do economists sometimes offer conflicting advice to policymakers?

Principles of Macroeconomics (MindTap Course List)

If Congress increased the personal tax rate on interest, dividends, and capital gains but simultaneously reduce...

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)

Factory overhead is also known as manufacturing overhead, indirect manufacturing cost, or factory burden.

College Accounting, Chapters 1-27 (New in Accounting from Heintz and Parry)