Homework Answers
Solution:
All costs can be accurately classified as either fixed or variable
Explanation:
Cost volume profit analysis is performed to determine the break even point and the required sales to earn the desired profit. The basic assumption of cost volume profit model is that all costs can be accurately classified as either fixed or variable.While applying the cost profit analysis it is assumed that all costs cab be classified into fixed and variable cost. In fact it is very difficult to identify each and every cost element as fixed and vairable. In the traditional type of recording costs, it is very difficult to segregate costs into fixed and variable.
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QUESTION 20 A basic assumption of the cost-volume-profit model is that: Cost drivers can be organized...
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Which one of the following is not an assumption of cost-volume-profit analysis? The behavior of costs is linear throughout the relevant range. All costs can be classified as either variable or fixed. Changes in activity and sales mix are the only factors that affect costs. O All units produced are sold.
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The cost volume profit analysis, commonly referred to as CVP, is a planning process that management...
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A basic assumption of activity-based costing (ABC) is that: Multiple Choice O All manufacturing costs vary...
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Multiple Cost Drivers Scottsdale Ltd. manufactures a variety of high-volume and low volume products to customer...
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Which one of the following is not an assumption of cost-volume-profit analysis? The behavior of costs is linear throughout the relevant range. All costs can be classified as either variable or fixed. Changes in activity and sales mix are the only factors that affect costs. O All units produced are sold.
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Multiple Cost Drivers Scottsdale Ltd. manufactures a variety of high-volume and low volume products to customer demand. Presented is information on 2013 manufacturing overhead and activity cost drivers Level Total Cost Units of Cost Driver $ 500.000 10.000 machine hours 100.000 500 customer orders Product 200.000 25 products Product X1 required 2,000 machine hours to fill 10 customer orders for a total of 8,000 units. (a) Assuming all manufacturing overhead is estimated and predicted on the basis of machine hours,...
Franklin Cameras, Inc. manufactures two models of cameras. Model ZM has a zoom lens; Model DS has a fixed lens. Franklin uses an activity-based costing system. The following are the relevant cost data for the previous month: + per Direct Cost per Unit Direct materials Direct labor Model ZM $20.60 29.20 Model DS $10.60 13.20 Category Unit level Batch level Product level Facility level Estimated Cost $ 24,000 47,500 87,500 270,000 $429,000 Cost Driver Number of units Number of setups...
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