If the slope coefficient is 0.60 and the difference in machine hours is $50000, then difference in cost can be __________?
Correct answer: C. $30,000
- A. $68,700
- B. $58,700
- C. $30,000
- D. $83,333.34
Explanation
The slope coefficient represents cost per machine hour, so the cost change is 0.60 × 50,000 = $30,000. The fixed cost does not affect the difference between two activity levels.
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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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