Cost Classification and Behaviour part 1 – ACCA Management Accounting (MA)/you
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Hi sir should I do my study kit questions for each chapter or should I do it later
I have a question from a question from the BPP exam kit.
It asks if the given costs are fixed, variable or semi variable and the answer says:
The key to the question is to understand that for variable costs the cost per unit is constant, whilst for fixed costs the total cost is constant. Cost X can quickly be identified as a fixed cost as the total cost between the two output levels is unchanged (10,000 units x
S3 = 15,000 units x $2). Cost
Y is a variable cost because the cost per unit is constant.
Cost Z meets neither of these criteria because it contains elements of both fixed and variable costs, and therefore is a semi variable cost.
Why are variable costs the same per unit? How would I go about answering a question like this next time and how can I tell if a cost is semi variable if they just give two costs for two levels of activity?
Please help
The variable costs are always the same per unit. The whole nature of variable costs is that the total variable cost varies with the level of production.
The whole nature of fixed costs is that the total fixed cost remains the same regardless of the level of production.
Have you watched all of the lectures working through this chapter of our free lecture notes, because this is all explained in the lectures?
Hi John,
Thank you so much for these. I passed my FA exam a few weeks ago thanks to your lectures.
I might be getting mixed up here with accounting principles (after doing the FA exam), but you mention in the lecture that delivery to customers comes under non- manufacturing costs. I though carriage outward was something that was not recognised by a business.
Is it just the case that they are accounted for in terms of planning as the business still have to pay for it?
Thanks
Joshua
(From Belfast NI)
Carriage outwards is an expense, and all expenses have to be recorded by businesses 馃檪
Shouldn’t Builder’s cost unit be per square meter?
What will be the unit cost of the farmer who produces 1. a maize in Kgs, broilers and layers?I think insurance of the factory is the overheads,I’m I correct?
Are wages of maintenance men and depreciation of machines fixed production overheads or variable production overheads?
Is rent of offices an administration cost? If not, then what type of non-production cost is it?
Yes, it is administration.