Behaviour Of Costs & Identifying Behaviour Of Costs

Question 1

What are the 4 most common behaviours of costs ?

Answer 1

1. Fixed-costs
2. Stepped fixed-costs
3. Variable-Costs
4. Semi-Variable costs

Question 2

Behaviours of costs

If a cost varies depending on the volume of activity it is a …………. ? cost

Answer 2

Variable cost

Question 3

Behaviours of costs

What are the most common vairable costs that a business may come across ?

Answer 3

• Direct labour
• Direct materials

Question 4

Behaviours of costs

Which type of cost stays the same at different levels of output ?

Answer 4

Fixed cost

Question 5

Behaviours of costs

Rent, Lease payments and insurance are all examples of what type of cost ?

Answer 5

Fixed costs

Question 6

Behaviours of costs

Semi-variable costs combine which costs?

Answer 6

Fixed and variable costs

Question 7

Behaviours of costs

As activity increases the ……….. cost increases ?

Answer 7

Variable

Question 8

Behaviours of costs

Looking at the behavior of costs in a more long term aspect all costs show a ………… behaviour

Answer 8

Variable

Question 9

Behaviours of costs

What method/formula is used to separate the fixed and vairiable costs within semi-variable costs ?

Answer 9

High low method