Write a linear cost function equation for each of the following conditions. Use y for estimated costs and X for activity of the cost driver. a. Direct materials cost is $2.70 per pound b. Total cost is fixed at $800 per month regardless of the number of units produced. c. Auto rental has a fixed fee of $90.00 per day plus $1.75 per mile driven. d. Machine operating costs include $1,000 of maintenance per month, and $15.00 of coolant usage costs for each day the machinery is in operation.
Write a linear cost function equation for each of the following conditions. Use y for estimated costs and X for activity of the cost driver. a. Direct materials cost is $2.70 per pound b. Total cost is fixed at $800 per month regardless of the number of units produced. c. Auto rental has a fixed fee of $90.00 per day plus $1.75 per mile driven. d. Machine operating costs include $1,000 of maintenance per month, and $15.00 of coolant usage costs for each day the machinery is in operation.
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter6: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 2E: Identify cost graphs The following cost graphs illustrate various types of cost behavior: For each...
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Write a linear cost function equation for each of the following conditions. Use y for estimated costs
and X for activity of the cost driver.
a. Direct materials cost is $2.70 per pound
b. Total cost is fixed at $800 per month regardless of the number of units produced.
c. Auto rental has a fixed fee of $90.00 per day plus $1.75 per mile driven.
d. Machine operating costs include $1,000 of maintenance per month, and $15.00 of coolant usage
costs for each day the machinery is in operation.
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