Question

*Machines oiled every 2,000 hours of use. Machinery does not run 24/7 and has downtime. Cal and B.J. asked you why you cared about the cost behavior of their different expenses. Explain to them what a variable cost is and what a fixed cost is. Explain to management what the role and value of management accounting is. Explain the ethical responsibility you would have as LPIC's managerial accounting consultant. List the stakeholders affected by the recommendations and decisions that you and management make. What responsibility do you and management have to those stakeholders?

Answer 1

1 - A variable cost is a corporate expense that changes in proportion to production output. Variable costs increase or decrease depending on a company's production volume; they rise as production increases and fall as production decreases. Examples of variable costs include the costs of raw materials and packaging.

  A fixed cost is a cost that does not change with an increase or decrease in the amount of goods or services produced or sold. Fixed costs are expenses that have to be paid by a company, independent of any specific business activities.QQuestion 2-QQuestion 3-