3 In describing the cost equation Ya bX a is A the dependen

3. In describing the cost equation, Ya + bX, \"a\" is: A. the dependent variable cost. B. the independent variable the level of activity. C. the total fixed cost D. the variable cost per unit of activity. 4. The following costs were incurred in April: Direct materials $18,000 Direct labor Manufacturing overhead $33,000 Selling expenses Administrative expenses $19,000 $21,000 $14,000 Conversion costs during the month totaled: A. $39,000 B. $54,000 C. $105,000 D. $51,000

Solution

3.In the cost equation;Y=a+bX

Y=total cost of firm

a=Total fixed cost

b=Variable cost per unit

X=level of activity,

It is to be noted that total fixed cost and variable cost per unit do not change with change in units.

Hence the correct option is C.

4.

Conversion cost=Direct labor+Manufacturing overhead

=(21000+33000)=$54000.