If the difference between costs linked to highest and lowest observation of cost driver, is $8000 and observation of cost driver is 40 machine hours, then slope coefficient will be _____________?
Correct answer: B. $200
- A. $16,000
- B. $200
- C. $400
- D. $20,000
Explanation
The slope coefficient equals the change in cost divided by the change in the cost driver: $8,000 ÷ 40 machine hours = $200 per machine hour.
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Cost accounting measures and analyses the cost of producing goods or providing services for planning, control and pricing decisions. It covers direct and indirect costs, fixed and variable costs, job and process costing, break-even analysis, marginal costing, overhead allocation, and the difference between product cost and period cost.
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