Using the Account Classification Method, Estimating the Change in Variable

question 1

Multiple Choice

Using the account classification method, estimating the change in variable costs involve three steps.Which of the following is correct?

• A)I.Sum the costs classified as fixed to obtain the total fixed costs for the most recent period. II.Multiply the amount in (I) by the volume of activity for the corresponding period to estimate the unit fixed cost.
• III)Divide (2) by the change in activity to estimate the total controllable cost.
• B)I.Sum the costs classified as fixed to obtain the total fixed costs for the most recent period. II.Divide the amount in (I) by the volume of activity for the corresponding period to estimate the unit fixed cost.
• III)Multiply (2) by the change in activity to estimate the total controllable cost.
• C)I.Sum the costs classified as variable to obtain the total variable costs for the most recent period. II.Multiply the amount in (I) by the volume of activity for the corresponding period to estimate the unit variable cost.
• III)Divide (2) by the change in activity to estimate the total controllable cost.
• D)I.Sum the costs classified as variable to obtain the total variable costs for the most recent period. II.Divide the amount in (I) by the volume of activity for the corresponding period to estimate the unit variable cost.
• III)Multiply (2) by the change in activity to estimate the total controllable cost.

---

Definitions:

Physical Reactions

Changes in the state or properties of matter that do not involve a change in its chemical composition, such as melting, freezing, and evaporating.

Chemical Reactions

Processes by which substances interact to form new substances with different chemical compositions and properties.

Energy

The capacity to do work, existing in multiple forms such as kinetic, potential, thermal, electrical, chemical, nuclear, and more, crucial in all aspects of life and technology.

Biological Action

The processes and activities carried out by living organisms including growth, reproduction, and response to the environment.