Exam 3: Cost Behavior

Select the appropriate item for each of the definitions listed below. a. committed fixed cost b. discretionary fixed cost c. mixed cost d. step cost -may involve a long-term contract

Per-unit fixed costs

Figure 3-10. The following cost formula was developed using the monthly data for an accounting firm. Total cost = $87,100 + ($210 *number of tax returns) -Refer to Figure 3-10. The term "total cost"

Figure 3-1. Total cost = Fixed cost + (Variable Rate * Output) -Refer to Figure 3-1. In the cost formula above which element would be the slope?

Using the high-low method, the calculation of the cost line uses the highest and lowest activity period.

MATCHING Select the appropriate cost behavior for each of the costs listed below. a. variable b. fixed -factory supplies

Select the appropriate cost behavior for the following costs incurred by an automobile manufacturer. a. variable b. fixed -cost of transporting cars to dealerships

Select the appropriate type of cost for each of the definitions below. a. variable b. fixed c. mixed d. step -will increase in total in direct proportion to an increase in the cost driver

Select the appropriate item for each of the definitions listed below. a. relevant range b. cost behavior c. driver d. variable cost e. fixed cost -a factor that causes a change in cost or activity

___________________ are costs that in total vary in direct proportion to changes in output within the relevant range.

Select the appropriate type of cost for each of the definitions listed below. a. variable b. fixed c. mixed d. step -will decrease on a per-unit basis as output increases