If the difference between costs linked to highest and lowest observation of cost driver is $36000 and observation of cost driver is 30 machine hours, then slope coefficient would be __________?
Correct answer: A. $1,200
- A. $1,200
- B. $1,400
- C. $1,600
- D. $1,800
Explanation
The slope coefficient equals the change in cost divided by the change in machine hours: $36,000 ÷ 30 = $1,200 per machine hour. Thus option a gives the variable cost rate.
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About Cost Accounting
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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