Reference no: EM131258713
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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Company observed a decrease in the cost per unit
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