EXAM THREE Flashcards
Chapter 18
the study of how specific costs respond to
changes in the level of business activity. These business activities could be
sales volume or quantity of goods.
Cost Behavior Analysis
Chapter 18
identifies the activity that
causes change in the behavior of costs. More
often than not, volume/quantity of output is
used as the activity index
Activity Index
Chapter 18
Costs that vary in total directly and proportionately with changes in the activity level
Total Variable Costs
Chapter 18
Variable costs that remain the same at every level of activity
Unit Variable Costs
Chapter 18
Costs that remain the same in total regardless of changes in the activity level within a relevant range
Total Fixed Costs
Chapter 18
Costs that varies inversely with activity: as volume increases, unit cost declines, and vise versa
Unit Fixed Costs
Chapter 18
- Costs that have both a variable cost and a fixed component
- Change in total but not proportionately with changes in activity level
Mixed Costs
Chapter 18
This is the range of activity a company expects to operate during a year
Relevant Range
Chapter 18
High-Low Method
Chapter 18
Regression vs. High-Low Method
Chapter 18
Contribution Margin
Chapter 18
Break-Even Point
Chapter 18
The difference between actual or expected sales and
sales at break‐even point
Margin of Safety
Chapter 18
