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27 currently most administrative personnel costs would be classified as fixed costs 4300428

 

27) Currently, most administrative personnel costs would be classified as fixed costs.

28) Fixed costs depend on the resources used, not the resources acquired.

29) The variable cost per unit of a product should stay the same throughout the relevant range of production.

30) An appropriate cost driver for shipping costs might be the number of units shipped.

31) Butler Hospital wants to estimate the cost for each patient stay. It is a general health care facility offering only basic services and not specialized services such as organ transplants.

Required:

a.Classify each of the following costs as either direct or indirect with respect to each patient.

b.Classify each of the following costs as either fixed or variable with respect to hospital costs per day.

 

DirectIndirectFixedVariable

 

Electronic monitoring________________________________

Meals for patients________________________________

Nurses' salaries________________________________

Parking maintenance________________________________

Security________________________________

 

32) The list of representative cost drivers in the right column below are randomized with respect to the list of functions in the left column. That is, they do not match.

 

 

Function

 

Representative Cost Driver

1.

Purchasing

A.

Number of employees

2.

Billing

B.

Number of shipments

3.

Shipping

C.

Number of customers

4.

Computer Support

D.

Number of invoices

5.

Personnel

E.

Number of desktop computers

6.

Customer Service

F.

Number of purchase orders

 

Required:

Match each business function with its representative cost driver.

 

 

Function

Insert letter of appropriate driver (A through F)

1.

Purchasing

 

2.

Billing

 

3.

Shipping

 

4.

Computer Support

 

5.

Personnel

 

6.

Customer Service

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

33) Describe a variable cost. Describe a fixed cost. Explain why the distinction between variable and fixed costs is important in cost accounting.

 

 

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