As EEC's corporate business financial analyst, you will need to have a clear understanding of the...

Question

As EEC's corporate business financial analyst, you will need to have a clear understanding of the different types of costs (variable, fixed, and mixed) that the company carries. Complete the following for this assignment:

Review EEC's journal activity.
Define and identify its variable, fixed, and mixed costs.
Determine what affect a sales volume increase or decrease will have on unit fixed cost, unit variable cost, total fixed cost, and total variable cost.

Clickhereto view EEC's journal activity.

David · Accepted Answer

Refrence – Wikipedia Variable cost, Fixed cost and Mixed cost
Defination of all Costs :
Variable Cost: 
When there is Changes in the cost due to changes in the level of activity , the cost is called variable cost.
 The variable cost is directly proportional to the the number  of units manufactured.
Any increase or decrease in the change in the goods , will have the same effect in the variable cost.
Cost per unit  wont change as the number of units change.
Examples are :
Direct material, direct labor and variable overhead
are all variable costs. 
Costs that vary with sales, such as selling commission  are variable costs.
It is a variable cost because any increase / decrease in the sales will have same effect in the selling commission. 
Fixed Cost: 
When there is no Change  in the cost due to changes in the level of activity , the cost is called fixed cost.
Cost per unit will  change as the number of units change.
The cost will remain fixed even if there is any increase or decrease in the units manufactured.
Rent, insurance, administrative salaries are examples of fixed costs. These costs do not change just because they have to be paid irrespective of the production activity.
Mixed Costs are  called semi-variable :
Costs that contains both variable as well as  fixed costs components.

As EEC's corporate business financial analyst, you will need to have a clear understanding of the different types of costs (variable, fixed, and mixed) that the company carries. Complete the following...

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