a) i. Explain the differences between economic cost and accounting cost. ii. What are the differences between
Question:
a)
i. Explain the differences between economic cost and accounting cost.
ii. What are the differences between explicit and implicit costs?
iii. Discuss the following cost concepts based on the view of the accountants and economists:
Depreciation cost measurement
Inventory valuation
Unutilized facilities
Measures of profitability
b) Consider the following variable cost function:
VC = 120Q – 9Q2 + 0.25Q3
Fixed costs are equal to $180 and Q is the output.
i. Determine the average variable cost function.
ii. Find the minimum AVC quantity.
iii. Determine the marginal cost function.
iv. The marginal cost is also the derivative of variable cost. Explain
Management Accounting Information for Decision-Making and Strategy Execution
ISBN: 978-0137024971
6th Edition
Authors: Anthony A. Atkinson, Robert S. Kaplan, Ella Mae Matsumura, S. Mark Young