If the difference in costs is $7000 and the difference in machine hours of is $18000, then slope coefficient would be ____________?
Correct answer: B. 0.39
- A. 2.571
- B. 0.39
- C. 0.2571
- D. 3.39
Explanation
The slope coefficient equals the change in cost divided by the change in machine hours: 7,000/18,000 = 0.3889, which rounds to 0.39. It measures the cost incurred per additional machine hour.
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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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