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- Ch. 5 Fixed Costs/Per Unit Pleaes explain the following concept/rule and give an example: Why do fixed costs on a per unit bases decrease with an increase in activity level? Also what is the difference between a fixed cost and a per-unit fixed cost?Q45 Under which of the following cost approach limitations the economic value of human resources increases over time as the people gain experience but the capital cost diminishes through amortization process and hence becomes difficult to reconcile it. a. Standard cost b. Replacement cost c. Opportunity cost d. Historical cost27) Which among the following cost encourage management to focus on life cycle costing? a. All the options listed b. Maintenance costs c. Repair costs d. Warranty costs
- Exercise 22.1 (Static) Accounting Terminology (LO22-1, LO22-4, LO22-6) The following are nine technical accounting terms: Responsibility margin Contribution margin Performance margin Transfer price Cost-plus transfer price Product costs Common fixed costs Traceable fixed costs Committed fixed costs Each of the following statements may (or may not) describe one of these technical terms. For each statement, indicate the accounting term described, or answer "None" if the statement does not correctly describe any of the terms. a. The costs deducted from contribution margin to determine responsibility margin. b. Cost to produce plus a predetermined markup. c. Fixed costs that are readily controllable by the manager. d. A subtotal in a responsibility income statement, equal to responsibility margin plus committed fixed costs. The subtotal in a responsibility income statement that is most useful in evaluating the short-run effect of e. various marketing strategies on the income of the…Yau are the project munager for a technical implementstion project. The customer has requested that you factor in the after-the-project costs such as maintenance and sence. This is in example of which one of the following. A. Life griecosts B. Scope creep C Propect spin olf 0, Operations14. Customer life-cycle costs: Select one: a. Are the replacement costs of using a product or service. b. Are the costs to the customer of buying and using a product until it is replaced. c. Are the same as the selling life-cycle prices. d. Focus on marketing costs. e. Are the costs the selling company incurs to satisfy the customer.
- Question 8 Which costs will change with a decrease in activity within the relevant range? Unit variable cost and unit fixed cost. O Unit fixed cost and total fixed cost. Unit fixed costs and total variable cost. O Total fixed costs and total variable cost.Specs Co is a manufacturer of spectacles and contact lenses. It is evaluating four projects for investment purposes. The projects are being evaluated based on their profitability, which is dependent on market conditions. Market conditions are forecast to be either good, average or poor and the probability of those market conditions occurring are 50%, 30% and 20% respectively. Specs Co has prepared the following profit table: Market conditions Good Average Poor Project 1 $160,000 $80,000 $10,000 Project 1 Project 2 Project 3 Project 4 Project 2 Project 4 $150,000 $130,000 $100,000 $70,000 $20,000 ($20,000) ($30,000) The profitability of the projects has been calculated after deducting directly attributable fixed costs as follows: Fixed costs $500,000 $400,000 $250,000 $200,000 Project 3 $140,000 $60,000 Specs Co has also recently employed a trainee management accountant who has been asking the finance director about how expected values can be used by an organisation.Coated Tissue Te 48A elearn.squ.edu.om/ Doglerehromme m (Academic) Which of the following occurs if a company experiences an increase in its fixed costs? Select one: O a. The break-even point would increase. Ob The contribution margin would decrease. Oc. More than one of the answers would occur. Od. Net income would increase, Oe. The break-even point would decrease.
- Excercise 3.21 Future costs that differ across alternatives are: a. Opportunity costs b. Sunk costs c. Relevant costs d. Variable costsQuestion 44 Which of the following is most likely a fixed cost? A. Labor cost. B. Energy cost.C. Property taxes. D. Raw materials cost.25 Projects that are calculated as having negative NPVs should be: A charged less in overhead costs. B rejected or abandoned. C discounted using lower rates. D depreciated over a longer time period. Ο Α OB OC O D