If the difference between costs linked to highest and lowest observation of cost driver is $27000 and observation of cost driver is 90 machine hours, then slope coefficient would be ____________?
Correct answer: C. $300
- A. $800
- B. $400
- C. $300
- D. $600
Explanation
The slope coefficient is the cost change per machine hour: $27,000 ÷ 90 = $300 per hour. This makes option c correct.
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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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