The Controller for Andy's Bicycles Has Gathered the Following Cost

question 183

Essay

The controller for Andy's Bicycles has gathered the following cost and activity level information:

a.What is the total cost of producing 1,000 racing bicycles?
b.What is the variable cost of producing each racing bicycle?
c.Suppose the controller uses the average cost to predict total costs.What total cost would the controller calculate for 2,500 racing bicycles?
d.If the controller uses the cost equation to predict total costs,what total cost would the controller calculate for 2,500 racing bicycles?
e.Is there a difference between the forecasted total cost using average cost versus the cost equation? If there is a difference,what creates the difference? If there is no difference,when would there be a difference?

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Definitions:

Position Analysis Questionnaire

A standardized tool used for assessing the duties and responsibilities of a job for the purpose of classification and evaluation.

Functional Job Analysis

An approach to job analysis that focuses on the tasks and duties performed in a job, as well as the functions necessary to accomplish them.

Managerial Jobs

Positions within an organization responsible for overseeing, planning, and coordinating the activities of a group or department, ensuring goals and objectives are met efficiently.

Data Analytics

The process of examining datasets to draw conclusions about the information they contain using specialized systems and software.