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Fixed cost and Variable cost

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Costs can be classified into two categories, fixed and variable costs. These costs behave differently based on the level of sales volumes. Suppose we are running a restaurant and have identified certain costs along with the number of annual units sold of 1000.

Item: Raw Materials (cost for hamburgers)

Total Annual Cost: 650

Item: Building Rent

Total Annual Cost: 9000

Identify which cost item above is fixed and variable and why? What is the cost per unit of each? Suppose we increased our sales volume to 6000 units and then to 8000 units the following year (and are still within the relevant range), what would be the total annual cost and unit cost of fixed and variable costs?

# Objective: Describe the functions of managerial accounting.
# Provide an overview of the external uses of accounting.
# Recognize situations that present potential ethical and legal issues and develop solutions for those issues.

Must be in APA format
Show all work!! Below is how it will be graded.

Substance
The submission correctly identifies and applies the concepts of financial and managerial accounting in all instances 20-25
The submission correctly identifies and applies the concepts of financial and managerial accounting in most but not all instances 15-19
The submission correctly identifies the concepts of financial and managerial accounting but not apply it all instances 10-14
The submission references but incorrectly identifies or applies the concepts of financial and managerial accounting in most instances 5-9
The submission does not include or does not correctly apply the concepts of financial and managerial accounting 0-4

Form
Proper Use of APA Format, no spelling or grammar errors, excellent flow and readability of writing, use own words, quotes are used sparingly and appropriately. Using outside research. At least two responses that provide a critique of post (provided assistance or asked a question that displayed mastery of concepts). Completed in an interactive manner over more than 24 hours. 20-25
Some improper use of APA Format, some spelling or grammar errors, good flow and readability of writing, use own words, quotes are used appropriately. At least two responses that provide a critique of post (provided assistance or asked a question that displayed mastery of concepts). Completed in an interactive manner with sufficient time for interaction. 15-19
Improper use of APA Format, spelling or grammar errors, fair flow and readability of writing, not much use own words, some inappropriate quotes. Responses that provide a critique of post (provided assistance or asked a question that displayed mastery of concepts). 10-14
No APA Format, spelling or grammar errors, poor flow and readability of writing, not much use own words, too many quotes. No responses. 0-9

Solution Preview

Costs can be classified into two categories, fixed and variable costs. These costs behave differently based on the level of sales volumes. Suppose we are running a restaurant and have identified certain costs along with the number of annual units sold of 1000.
Item: Raw Materials (cost for hamburgers)
Total Annual Cost: 650
Item: Building Rent
Total Annual Cost: 9000

Identify which cost item above is fixed and variable and why? What is the cost per unit of each? Suppose we increased our sales volume to 6000 units and then to 8000 units the following year (and are still within the relevant range), what would be the total annual ...

Solution Summary

Response discusses the fixed cost and Variable cost

$2.19