Consider the Following Cost Data for the Cost Object, Number

question 112

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. Cost C is best described as: $\begin{array}{c}\begin{array}{c}\text {Number of}\\\underline{\text { Machine Setups}}\\0 \\10 \\20 \\30 \\40 \\50\end{array}\begin{array}{c}\\\underline{\text { Cost A }} \\\$ 0 \\20 \\40 \\60 \\80 \\100\end{array}\begin{array}{c}\\\underline{\text { Cost B }} \\ \$ 80 \\79 \\82 \\78 \\81 \\79\end{array}\begin{array}{c}\\\underline{\text { Cost C} } \\\$ 5 \\37 \\66 \\91 \\123 \\154 \end{array}\end{array}$

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

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Definitions:

Stated Value

A value assigned to a company's no-par value stock by the company’s board of directors.

Shares

Shares represent an ownership stake in a company or financial asset, distributing profits equally through dividends if any are declared.

Earnings Per Share

A measure of a company's profitability calculated as net income divided by the number of outstanding shares of its common stock.

Treasury Shares

Shares of a company's own stock that it has repurchased and are held in the company's treasury.