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Company observed a decrease in the cost per unit
Course:- Financial Accounting
Reference No.:- EM131258713

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Assignment Help >> Financial Accounting

A company observed a decrease in the cost per unit. All other things being equal, which of the following is most likely true?

The company is studying a variable cost, and total volume has increased.

The company is studying a variable cost, and total volume has decreased.

The company is studying a fixed cost, and total volume has increased.

The company is studying a fixed cost, and total volume has decreased.

The company is studying a fixed cost, and total volume has remained constant.

Bowman, Inc., has only variable costs and fixed costs. A review of the company's records disclosed that when 200,000 units were produced, fixed manufacturing costs amounted to \$1,000,000 and the cost per unit manufactured totaled \$19. On the basis of this information, how much cost would the firm anticipate at an activity level of 215,000 units?

\$4,010,000.

\$3,997,000.

\$3,989,000.

\$3,800,000.

Some other amount not listed above.

Normal Company pays a sales commission of 4% on each unit sold. If a graph is prepared, with the vertical axis representing per-unit cost and the horizontal axis representing units sold, how would a line that depicts sales commissions be drawn?

As a straight diagonal line, sloping upward to the right.

As a straight diagonal line, sloping downward to the right.

As a horizontal line.

As a vertical line.

As a curvilinear line.

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