Asked by Ranie Nikisha on May 04, 2024
Verified
In the standard cost formula Y = a + bX, what does the "X" represent?
A) total cost
B) total fixed cost
C) the level of activity
D) variable cost per unit
Standard Cost Formula
A predefined cost based on historical data, industry standards, and projected material, labor, and overhead costs, used for budgeting and cost management.
Level Of Activity
A measure of the amount of work performed or production achieved in a specific period of time, often related to capacity utilization in operations management.
- Apply the conventional cost calculation method for overall, fixed, and variable expenses.
Verified Answer
ML
miguel lopezMay 11, 2024
Final Answer :
C
Explanation :
In the standard cost formula Y = a + bX, the "X" represents the level of activity. It could be units produced, labor hours worked, or any other relevant measure of output or input. The variable cost per unit is represented by "b," while "a" represents the total fixed cost. "Y" represents the total cost.
Learning Objectives
- Apply the conventional cost calculation method for overall, fixed, and variable expenses.