If the fixed setup cost is $21000 and the variable setup cost is $11000, then the setup cost would be _________?
Correct answer: D. $32,000
- A. $12,000
- B. $15,000
- C. $10,000
- D. $32,000
Explanation
Total setup cost combines its fixed and variable components: $21,000 + $11,000 = $32,000. The distinction between fixed and variable portions does not change their combined total.
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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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