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What costs remain the same regardless of the number of units produced?
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∙ 12y ago
Fixed costs
Wiki User
∙ 12y ago
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What Business costs that remain stable regardless of the production level achieved are called?
Fixed Costs
As output increases the average fixed costs?
remain constant
A foundry produced 45000 tons of steel in March that costs 1150000 In April it produced 35000 tons that cost 950000 what is the cost function?
Cost function is as follows: Total Cost = 25000 + 2X where X is number of units
Why is cost important in a business?
It's important because costs, fixed and variable, have to be paid regardless of how much is produced, or else the business will shut down or go bankrupt. They are also important to consider because they must be subtracted from revenue to find profit.
Does Fixed cost per unit increase as activity decreases and decrease as activity increases?
true.as fixed costs remain the same with change in activity, the per unit price of each unit changes inversely with activity level.rent is generally a fixed costs.if rent is $10,000, and 100 units are produced, then the per unit price is $10 with respect to rent.if rent is $10,000, and 200 units are produced, then the per unit price is $5 with respect to rent.thus, as we produced more units, or as the activity level went up, the average costs per unit decreased.
Expenses that are not affected by sales volume are called?
Expenses that are not affected by sales volumes are called fixed costs. These costs remain constant regardless of the number of units produced or number of units sold. An example would be the lease on a building. Sales volume may fluctuate but lease payments typically remain constant (as outlined by the lease agreement).
What Business costs that remain stable regardless of the production level achieved are called?
Fixed Costs
Business costs that remain stable regardless of the production level achieved are called costs?
Fixed Cost
Costs and expenses that tend to remain constant in total regardless of variations in volume of activity?
cost and expense that tend to remain constant in total regardless of variations in volume of activity are termed?
How do you calculate fix cost per unit?
Learn to study your Business Studies curriculum properly. The fixed cost is the same regardless of the number of units produced. The variable costs are the costs of producing x number of units. The break-even point is where value of sales = fixed costs + variable costs.
How do you calculate the fixed cost per unit?
Learn to study your Business Studies curriculum properly. The fixed cost is the same regardless of the number of units produced. The variable costs are the costs of producing x number of units. The break-even point is where value of sales = fixed costs + variable costs.
What type of costs is incurred regardless of how much of a good or service is produced?
This type of cost is known as a Fixed Cost: a cost that remains constant, regardless of any change in a company's activity.
Are selling costs variable costs?
If selling costs varies with production level then selling costs are variable costs but if they remain fix then these are fixed costs.
Define average total cost?
Average total cost is the sum of all the production costs divided by the number of units produced.
What are underlying assumptions in break even point analysys?
1- quantity of units produced = quantity of unit sold , so there is no change in invetory . 2- prices will remain fixed. 3- variable cost rate will remain fixed 4- total fixed costs will remain fixed up to maximum manufacuring capacity of the firm
As output increases the average fixed costs?
remain constant
What effect do you think the existence of a high proportion of fixed costs has on the desirability of using ABC methods?
The existence of a high proportion of fixed costs will increase the desirability of using ABC methods. Under the traditional method, fixed costs remain the same regardless of the level of activity on the number of units produced. However, activity based costing is a method that measures cost of a product/service based on the activities preformed to produce the product/service. Under the ABC system, an effort is made to account for as many costs as possible as a direct cost of production. The costs that are incurred are accumulated by activity and then transferred from the activities to the products produced based on how much consumption was used by each activity for each product manufactured. The activity costs are then transferred to products as they move through the production process. Any fixed costs that are left over are not assigned to the cost of the product and will be allocated in the traditional process. Because activity based costing system classifies more costs as direct than traditional systems do, managers have greater confidence in the costs of products and services reported by ABC method. And if managers supervise and focus on activities, are managed effectively, a company will experience lower unit costs and will become more competitive.
