EXERCISE 5-12 (30 MINUTES)

2. - SOLUTIONS TO QUESTION MANAGERIAL ACCOUNTING CH05 COST BEHAIVIOR ANALYSSIS AND USE
SOLUTIONS TO QUESTION MANAGERIAL ACCOUNTING CH05 COST BEHAIVIOR ANALYSSIS AND USE
2. Analysis of the mixed expenses:

Salaries and

Commission

Expense

Units Shipping

High level of activity ... 5,000 A$38,000 A$90,000 Low level of activity... 4,000 34,000 78,000 Change ... 1,000 A$ 4,000 A$12,000 Variable cost element: Change in cost Variable rate=Change in activityA$4,000Shipping expense: =A$4 per unit.