Cost Behavior: Fixed, Variable, Mixed Flashcards
Cost behavior is defined as…
how a cost behaves when the quantity sold or made changes (volume)
do variable costs change when volume changes?
YES
variable costs change _____ to changes in volume
IN TOTAL in direct proportion
what cost does not change when volume changes for variable costs?
PER UNIT
_____ cost does not change for variable costs
per unit
it is a variable cost if…
it costs more in total to make or sell ONE more product
DM, DL, and variable overhead are always…
variable costs
what are always variable costs?
DM, DL, and variable MOH
as the volume changes, the total cost for ____ changes
direct labor
for a fixed cost, the total cost _______ when volume of activity changes
does not change
for fixed costs, the ______ changes as volume changes
cost per unit
for fixed costs the ______ changes while the ______ does not change
cost per unit, total cost
relevent range is…
the range of activity where the assumptions about cost behavior is valid
mixed costs are made up of..
both variable and fixed costs
total mixed costs =
total fixed costs + total variable costs
