If the difference in costs is $32000 and the slope coefficient is 0.40, then difference in machine hours would be ___________?
Correct answer: A. $80,000
- A. $80,000
- B. $12,800
- C. $70,000
- D. $22,800
Explanation
The slope equals the change in cost divided by the change in machine hours, so machine-hour change equals $32,000 ÷ 0.40 = 80,000 hours. The dollar sign attached to option A is a unit-label error, but its numerical value is 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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