x G The following is an extract of \" x Quiz 11 UNSW Moodie *https://moodie telt
ID: 2551032 • Letter: X
Question
x G The following is an extract of " x Quiz 11 UNSW Moodie *https://moodie telt.unsw.edu.aurmodiquiz/attempt.php?attempt-3558832 ,? Yue Xu UNSW St m tUser there is no change in the ratio of variable to fixed costs Question 9 Not yet answered Marked out of 1.00 The following is an extract of a cost report for Big Whale Car Wash for the six months from June to November. Management considers the activities in these six months as within the relevant range for the purpose of cost estimation. Month Number of cars washed Car washing labour costs Remove flag 7000 7200 6800 7100 6000 8000 June July August 500 520 480 September 510 400 600 The car washing labour cost is a: Select one: O Variable cost Fixed cost Step-fxed costExplanation / Answer
From the Above trend we came to know this is a semi variable cost.
What is semi variable cost:- A semi-variable cost, also known as a semi-fixed cost or a mixed cost, is a costcomposed of a mixture of fixed and variable components. Costs are fixed for a set level of production or consumption and become variable after this production level is exceeded. If no production occurs, a fixed cost is still incurred.
In the above question if we washed up to 400 cars there will be a fixed cost incurred of $6000 and after that $10 for each addtional car washed.
Like for 500 cars washed there will be a fixed cost of $6000 and above 400 cars which is 100 cars in this case an addtional cost of $10 for 100 cars so the total cost would be Fixed and variable cost.
$6000+($10*100)= $7000.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.