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Clerical costs in billing

Q11: Clerical costs in the billing department of Craig Company are a mixture of variable and fixed components. Records indicate that average unit processing costs are $0.50 per account processed at an activity level of 32,000 accounts. When only 22,000 accounts are processed, the total cost of processing is $12,500. Assuming that this activity is within the relevant range, at a budgeted level of 25,000 accounts:

A) processing costs are expected to total $8,750.
B )fixed processing costs are expected to be $10,400.
C) the variable processing costs are expected to be $0.35 per account processed.

Q12:The following production and average cost data for a month’s operations have been supplied by a company that produces a single product.

The total fixed manufacturing cost and variable manufacturing cost per unit are as follows:

A) $3,600; $7.50
B) $7,600; $7.50
C) $7,600; $9.90

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