- Variable costs will only vary at a constant cost per unit only within a specified range of output
and sales, beyond which it changes. Similarly, fixed costs are only fixed within a specified
relevant range only, beyond which they change as extra machines are purchased, hired, etc.
- The learning curve effect also makes variable costs and fixed production costs to change over
time.
- The random interference of factors beyond the organization?s control e.g. technology changes
and government regulations, may also make fixed and variable costs to behave differently.
Thus, fixed and variable costs will only be well behaved only and only if the activity levels
are within the relevant range.
marto answered the question on February 15, 2019 at 09:14
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The information given below relates to Wasp Ltd. which manufactures a single type of
chemical. Overhead processing costs for the last thirteen accounting months (of four...
(Solved)
The information given below relates to Wasp Ltd. which manufactures a single type of
chemical. Overhead processing costs for the last thirteen accounting months (of four weeks
each) have been as follows:
Date posted:
February 15, 2019
.
Answers (1)
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Central Machinery Ltd ,Is preparing its budget for the year ending 30 June 2004.For the fuel
expenses consumption it is decided to estimate an equation of...
(Solved)
Central Machinery Ltd ,Is preparing its budget for the year ending 30 June 2004.For the fuel expenses consumption it is decided to estimate an equation of the form ,y=a + b x, where y is the total expense at an activity level x, a is the fixed expense and b is the rate of variable cost.
Date posted:
February 15, 2019
.
Answers (1)
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Explain the advantage and disadvantages of high-low method of cost estimation.
(Solved)
Explain the advantage and disadvantages of high-low method of cost estimation.
Date posted:
February 15, 2019
.
Answers (1)
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The management of Limuru processing Company Ltd. Wishes to obtain better cost estimates to
evaluate the company's operations more effectively
(Solved)
The management of Limuru processing Company Ltd. Wishes to obtain better cost estimates to
evaluate the company's operations more effectively
Date posted:
February 15, 2019
.
Answers (1)
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State three disadvantages of using the high – low method for estimating costs
(Solved)
State three disadvantages of using the high – low method for estimating costs
Date posted:
February 15, 2019
.
Answers (1)
-
Briefly explain the following cost estimation methods:
(i). High-low method.
(ii). Simple regression method.
(Solved)
Briefly explain the following cost estimation methods:
(i). High-low method.
(ii). Simple regression method.
.
Date posted:
February 15, 2019
.
Answers (1)
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Jitegemee Company Ltd. Carries on its operations in Isiolo. In the recent, the Company has been
experiencing trading difficulties and is currently operating at 50% production...
(Solved)
Jitegemee Company Ltd. Carries on its operations in Isiolo. In the recent, the Company has been
experiencing trading difficulties and is currently operating at 50% production capacity. For the
year ending 31 January 2007, the company expects to achieve a revenue amount of Sh.24,
750,000 at 50% production capacity.
Date posted:
February 15, 2019
.
Answers (1)
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ABC Dental Clinic outsources specialized dental surgeons from private hospitals. The following
relates to the total labour hours and indirect labour costs for the year ended...
(Solved)
ABC Dental Clinic outsources specialized dental surgeons from private hospitals. The following relates to the total labour hours and indirect labour costs for the year ended 31 October 2010.
Date posted:
February 15, 2019
.
Answers (1)
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Explain the methods of cost estimation
(Solved)
Explain the methods of cost estimation
Date posted:
February 15, 2019
.
Answers (1)
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The information given below relates to Brutes Ltd which manufactures a single type of chemical.
Overhead processing costs for the last 8 months have been as...
(Solved)
Date posted:
February 15, 2019
.
Answers (1)
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Differentiate between a bin card and a stores ledger card.
(Solved)
Differentiate between a bin card and a stores ledger card.
Date posted:
February 15, 2019
.
Answers (1)
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Arap Teta General Hospital hires doctors from private hospitals. The following data relate to the
total labour hours and indirect labour costs for the year ended...
(Solved)
Arap Teta General Hospital hires doctors from private hospitals. The following data relate to the
total labour hours and indirect labour costs for the year ended 31 October 2012:
Date posted:
February 15, 2019
.
Answers (1)
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Explain two advantages of using simple linear regression method for cost estimation.
(Solved)
Explain two advantages of using simple linear regression method for cost estimation.
Date posted:
February 15, 2019
.
Answers (1)
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Briefly explain the following terms as used in cost accounting:
(i). Mixed costs
(Solved)
Briefly explain the following terms as used in cost accounting:
(i). Mixed costs
Date posted:
February 15, 2019
.
Answers (1)
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Differentiate between the following sets of terms:
i) Sunk cost and opportunity cost
ii) Cost centers and profit centers
iii) Direct lab our costs and indirect labor costs
iv)...
(Solved)
Differentiate between the following sets of terms:
i) Sunk cost and opportunity cost
ii) Cost centers and profit cent res
iii) Direct lab our costs and indirect lab our costs
iv) Prime cost and manufacturing overheads
Date posted:
February 15, 2019
.
Answers (1)
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The Luxury Hotels Ltd is used for conference bookings and private bookings. The conference
bookings include bookings for rooms each week while the remaining rooms are...
(Solved)
The Luxury Hotels Ltd is used for conference bookings and private bookings. The conference bookings include bookings for rooms each week while the remaining rooms are used for private guest bookings.
Additional information:
1. Variable cost of accommodating each guest is Sh. 1,750
2. Variable cost per week per room available is Sh. 5,600
3. The general fixed cost for private bookings per week is Sh. 8,100
4. The hotel charges Sh. 3,000 per person per night for accommodation for private guest bookings.
5. The hotel has been experiencing a high rate of staff turnover over the last 12 months.
6. Some of the costs for private guest bookings vary with the number of guests, regardless of the
length of their stay, while others vary with the number of rooms available in any week.
Required:
a) Total cost per guest per night for private guest bookings over the ten week period
b) Contribution and profit for private guest bookings for the ten week period
c) Highlight four possible reasons for the high rate of staff turnover in the hotel
Date posted:
February 15, 2019
.
Answers (1)
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Fair Price Limited produces a single product 'Zed': The store's manager has provided the
following information relating to the month of August 2010:
(Solved)
Fair Price Limited produces a single product "Zed': The store‟s manager has provided the
following information relating to the month of August 2010:
Date posted:
February 15, 2019
.
Answers (1)
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Distinguish between the following terminologies as used in cost accounting:
i) Relevant range and relevant costs.
ii) Opportunity costs and discretionary costs.
iii) By-products and joint products.
(Solved)
Distinguish between the following terminologies as used in cost accounting:
i) Relevant range and relevant costs.
ii) Opportunity costs and discretionary costs.
iii) By-products and joint products.
Date posted:
February 15, 2019
.
Answers (1)
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Distinguish between 'committed fixed costs' and 'discretionary fixed costs'.
(Solved)
Distinguish between 'committed fixed costs' and 'discretionary fixed costs'.
Date posted:
February 15, 2019
.
Answers (1)
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Explain the meaning of the following term in the context of cost accounting:
- Cost centre.
(Solved)
Explain the meaning of the following term in the context of cost accounting:
- Cost centre.
Date posted:
February 15, 2019
.
Answers (1)