Week 6 - Cost Behaviour and Job-Order Costing II Flashcards
1
Q
What is a mixed cost?
A
A cost that has both fixed and variable components
2
Q
What can a mixed cost also be known as?
A
Semi-fixed or semi-variable
2
Q
Define a mixed cost
A
Part of the cost changes with volume or usage, and part of the cost is fixed over time
3
Q
How can the total mixed cost be expressed?
A
As a line
Y = MX + C
4
Q
What does Y equal?
A
The total mixed cost
5
Q
What does C equal?
A
The total fixed cost
6
Q
What does M equal?
A
The variable cost per unit
7
Q
What does X equal?
A
The level of activity
8
Q
How can we tell the difference between a variable cost and a mixed cost?
A
A variable cost will start at the origin, whereas a mixed cost will start part way up the Y-axis
