Mining, Inc., is trying to identify the cost behavior of the three costs shown. Cost information is
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Question:
Mining, Inc., is trying to identify the cost behavior of the three costs shown. Cost information is provided for six months.
Cost 1 | Cost 2 | Cost 3 | |||||
Month | Units Produced | Total Costs | Cost per Unit | Total Costs | Cost per Unit | Total Costs | Cost per Unit |
1 | 8,000 | $10,000 | _____ | $24,000 | _____ | $32,000 | _____ |
2 | 10,000 | 10,000 | _____ | 29,000 | _____ | 40,000 | _____ |
3 | 12,000 | 10,000 | _____ | 33,600 | _____ | 48,000 | _____ |
4 | 14,000 | 10,000 | _____ | 36,400 | _____ | 56,000 | _____ |
5 | 16,000 | 10,000 | _____ | 38,400 | _____ | 64,000 | _____ |
6 | 18,000 | 10,000 | _____ | 39,600 | _____ | 72,000 | _____ |
Required:
Calculate the cost per unit, and then identify how the cost behaves (fixed, variable, or mixed) for each of the three costs.
Related Book For
Financial and Managerial Accounting Using Excel for Success
ISBN: 978-1111993979
1st edition
Authors: James Reeve, Carl S. Warren, Jonathan Duchac
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