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Amasarcas Inc., is a wholesaler that distributes a singleproduct. The company’s revenues and expenses...

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Accounting

Amasarcas Inc., is a wholesaler that distributes a singleproduct. The company’s revenues and expenses for the last twomonths are given below:

Sales in units

5,000 units

6,000 units

Sales revenue

$500,000

$600,000

     Expense A

  10,000

    10,000

     Expense B

125,000

150,000

     Expense C

    50,000

    74,000

     Expense D

    10,000

    18,000

     Expense E

    30,000

    30,000

Net income

$275,000

$318,000

Which of the expenses (A, B, C, D, and E) are variable? How canyou tell?

Which of the expenses (A, B, C, D, and E) are fixed? How can youtell?

Which of the expenses (A, B, C, D, and E) are mixed? How can youtell?

Answer & Explanation Solved by verified expert
4.4 Ratings (600 Votes)

Change
Units 5000 6000 1000 units
Expenses A 10000 10000 0 (10000-10000)
Expenses B 125000 150000 25000 (150000-125000)
Expenses C 50000 74000 24000 (74000-50000)
Expenses D 10000 18000 8000 (18000-10000)
Expenses E 30000 30000 0 (30000-30000)
The Expenses A and E are Fixed Expenses as there is no change in the expense with the increase in number of units
Particulars Per unit cost (Expense/ No of units) Per unit cost (Expense/ No of units) Per unit cost Change
Units 5000 6000 1000
Expenses B 125000 25 150000 25 0
Expenses C 50000 10 74000 12.33 2.33
Expenses D 10000 2 18000 3 1
As the per unit cost for Expense B is same and doesn`t change with change in no of Unit, Expense B are Variable.
Expense C and Expense D are neither fixed nor variable, these are mixed costs.

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In: AccountingAmasarcas Inc., is a wholesaler that distributes a singleproduct. The company’s revenues and expenses for...Amasarcas Inc., is a wholesaler that distributes a singleproduct. The company’s revenues and expenses for the last twomonths are given below:Sales in units5,000 units6,000 unitsSales revenue$500,000$600,000     Expense A  10,000    10,000     Expense B125,000150,000     Expense C    50,000    74,000     Expense D    10,000    18,000     Expense E    30,000    30,000Net income$275,000$318,000Which of the expenses (A, B, C, D, and E) are variable? How canyou tell?Which of the expenses (A, B, C, D, and E) are fixed? How can youtell?Which of the expenses (A, B, C, D, and E) are mixed? How can youtell?

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