(1) Explain the impact of a decrease in the level of activity (cost driver) on:

(a)total variable cost

(b)variable cost per unit of activity

(c)Total fixed cost

(d)fixed cost per unit of activity

Question 2

Describe how overhead may be under applied, and give two reasons for this

Question 3

Comfy Backpacks started and finished job number TK421, a batch of 100 backpacks, during July. The job required $4 250 of direct material and 25 hours of direct labour at $30 per hour. The predetermined overhead rate is $15.00 per direct labour hour.

Required:

What was the cost per backpack for job number TK421?

Question 4

Explain why an understanding of equivalent units is necessary to undertake process costing.

Question 5

Which of the following costs are likely to be controllable by the director of a hospital emergency room? Give a reason for your answer.

(a)medication administered

(b)overtime paid to nurses due to scheduling errors

(c)disposal of medical supplies past their use-by date

(d)depreciation of hospital beds

(e)share of allocated cleaning costs