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1.2.3.Student: charles poseyDate: 11/9/16Instructor: Anthony BattagliaCourse: ACC-500-Q1001-16TW1-BattagliaAssignment: Module Three PracticeProblemsSelect the choice that describes linear-cost behavior.A.Linear-cost behavior assumes that costs behave as a straight line. On a graph, the line intercepts the Y-axis at the variable cost estimate and then the total cost increases proportionately as the cost driver activity increases. The assumption is that the fixed cost per unit remains the same over a relevant range of activity.B.Assumes that costs behave in an upward sloping curve. On a graph, the line intercepts theY-axis at the fixed cost estimate. Total cost increases as the cost driver activity increases with the variable cost per unit increasing as the level of activity increases.C.Linear-cost behavior assumes that costs behave in a downward sloping curve. On a graph,the line intercepts the Y-axis at the fixed cost estimate. Total cost increases as the cost driver activity increases with the variable cost per unit decreasing as the level of activity increases.D.Linear-cost behavior assumes that costs behave as a straight line. On a graph, the line intercepts the Y-axis at the fixed cost estimate and then the total cost increases proportionately as the cost driver activity increases. The assumption is that the variable cost per unit remains the same over a relevant range of activity.(1) fixed coststep costvariable cost(2) fixed coststep costvariable cost(3) adding a fixed cost and a step cost togetheradding a fixed cost and a variable cost togetheradding a step cost and a variable cost togetherThe following cost function is a mixed cost. Total cost = $8,000 + $52 x units producedRequirement1.Explain why it is a mixed cost and not a fixed, variable, or step cost.The $8,000 is a (1) and the $52 per unit is a (2) . By definition,(3) produces a mixed cost.Why are fixed costs also called capacity costs?Module Three Practice Problems-charles posey1 of 1911/9/2016 3:10 PM
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