Question
InnovateTech Inc. is evaluating the cost behavior of three types of costs across three months. Month Units Produced Total Cost TT Cost per Unit TT
InnovateTech Inc. is evaluating the cost behavior of three types of costs across three months.
| Month | Units Produced | Total Cost TT | Cost per Unit TT | Total Cost UU | Cost per Unit UU | Total Cost VV | Cost per Unit VV |
|---|---|---|---|---|---|---|---|
| 1 | 1,800 | $3,600 | $4,800 | $7,200 | |||
| 2 | 3,600 | $3,600 | $6,400 | $14,400 | |||
| 3 | 900 | $3,600 | $3,200 | $3,600 |
Required: a. Calculate the cost per unit for each type of cost and classify them as fixed, variable, or mixed. Explain your classifications.
b. Discuss the impact of cost behavior understanding on strategic planning and decision-making.
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Essentials Of Managerial Accounting
Authors: Kurt Heisinger
1st Edition
0618436693, 978-0618436699
