Austin Muffler, Inc. operates an automobile service facility.
Question:
Austin Muffler, Inc. operates an automobile service facility. The table below shows information on the cost behavior.
| Total cost: | 20,000 units | 10,000 units | 80,000 units |
|---|---|---|---|
| Fixed costs | $40,000 | A | B |
| Variable costs | 6,000 | C | D |
| Cost per unit: | |||
| Fixed cost | E | F | G |
| Variable cost | H | I | J |
Required:
Fill in the missing amounts labeled A through J in the table below by the appropriate alpha character.
| A. | F. |
| B. | G. |
| C. | H. |
| D. | I. |
| E. | J. |
Cost Behavior:
In management accounting, cost behavior refers to the behavior of costs as the level of business activities changes. The proper classification of costs as either fixed, variable, or mixed costs is significant as it affects the pricing and other related decisions managers made.
Answer and Explanation: 1
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View this answerTo answer the following questions above, always remember the following basic concepts when dealing with fixed costs and variable costs.
- Fixed cost...
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Cost Behavior: Definition & Pattern Analysis
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Chapter 22 / Lesson 21
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Cost behavior is the change in total costs coming from business activities. Learn more about cost behavior, the definitions of fixed, variable, and mixed costs, and the pattern analysis for each type of cost.
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