List the two types of fixed costs and give example

Avoid plagiarism, the work should be in your own words, copying from students or other resources without proper referencing will result in ZERO marks. No exceptions.

All answers must be typed using Times New Roman (size 12, double-spaced) font. No pictures containing text will be accepted and will be considered plagiarism.

Requirements: full answer

Avoid plagiarism, the work should be in your own words, copying from students or other resources without proper referencing will result in ZERO marks. No exceptions.

All answers must be typed using Times New Roman (size 12, double-spaced) font. No pictures containing text will be accepted and will be considered plagiarism.

Assignment Question(s): (Marks 15)

Q1. List the two types of fixed costs and give example 2) Points)

Q2. Present and explain the equation of the total mixed cost line. (2 Points)

Q3. Why use an allocation base? (3 Points)

Q4. The following information summarizes the company’s cost structure: ( 4 points)

Required:

Estimate the following costs at the 40,000 unit level of activity:

a. Total variable cost.

b. Total fixed cost.

c. Variable cost per unit.

d. Fixed cost per unit. 

Q5. ABC Corporation manufactures two products, Product M and Product N. Product N is of fairly recent origin, having been developed as an attempt to enter a market closely related to that of Product N. Product N is the more complex of the two products, requiring one hour of direct labor time per unit to manufacture compared to one-half hour of direct labor time for Product M. Product N is produced on an automated production line.

Overhead is currently assigned to the products on the basis of direct labor-hours. The company estimated it would incur SAR 500,000 in manufacturing overhead costs and produce 10,000 units of Product N and 60,000 units of Product M during the current year. Unit cost for materials and direct labor are:

Required:

a. Compute the predetermined overhead rate under the current method of allocation and determine the unit product cost of each product for the current year.

b. The company’s overhead costs can be attributed to four major activities. These activities and the amount of overhead cost attributable to each for the current year are given below:

Using the data above and an activity-based costing approach, determine the unit product cost of each product for the current year. 

  (4 Points)