The total traceable costs of the account billing activity centre is $245,000. Cost behaviour analysis indicates that fixed costs are $75,000. Activity analysis indicates that the cost driver for account billing activity is the number of lines printed, and the total lines printed is 2,500,000.
-What is the variable cost per line?
A) $0.068
B) $0.098
C) $0.030
D) Cannot be determined

Question

Quizplus · Accepted Answer

Total traceable costs - Fixed costs = Variable costs
$245,000 - $75,000 = $170,000 (Variable costs)
Variable cost per line = Total variable costs / Total lines printed
$170,000 / 2,500,000 lines = $0.068 per line.

The Total Traceable Costs of the Account Billing Activity Centre