Consider the Following Cost Data for the Cost Object, Number

question 8

Multiple Choice

Consider the following cost data for the cost object, number of machine setups. Each set of costs (A, B, and C) is from a different type of manufacturing operation and represents the cost behaviour for the cost of that company's machine setups. $\begin{array}{c}\begin{array}{c}\text {Number of}\\\underline{\text { Machine Setups}}\\0 \\10 \\20 \\30 \\40 \\50\end{array}\begin{array}{c}\\\underline{\text { Cost A }} \\\$ 0 \\20 \\40 \\60 \\80 \\100\end{array}\begin{array}{c}\\\underline{\text { Cost B }} \\ \$ 80 \\79 \\82 \\78 \\81 \\79\end{array}\begin{array}{c}\\\underline{\text { Cost C} } \\\$ 5 \\37 \\66 \\91 \\123 \\154 \end{array}\end{array}$
Cost A is best described as:

• A) Variable
• B) Fixed
• C) Mixed
• D) Direct

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Definitions:

Merchandise

Goods that are bought and sold by businesses in the normal course of operations.

Foreign Exchange Loss

A decrease in domestic currency value resulting from transactions denominated in a foreign currency, often due to fluctuating exchange rates.

Ruble Receivable

An amount expected to be received denominated in Russian Rubles, typically from transactions or contracts.

Euro Payable

A liability or obligation denominated in euros payable to a creditor or supplier.