Chapter 12 Comments 8th ed

Chapter 12 Comments 8th ed - Instructor Comments Chapter...

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Instructor Comments Chapter Twelve Chapter 12 is an especially important chapter and lays the groundwork for many of the concepts that you will study in the remaining part of this course. This is the cornerstone chapter in the managerial accounting section of the text. Managerial accounting involves the following three major areas: Planning Control, and Decision-making On page 450, the authors introduce you to the concepts of variable and fixed costs. A variable cost is one that changes (in total) in direct proportion to a change in the volume of activity. A fixed cost is one that remains constant (in total) regardless of changes in the volume of activity. Note that on a per unit basis, a variable cost remains constant regardless of changes in the volume of activity. Furthermore, a fixed cost when defined on a per unit basis varies in direct proportion to a change in the volume of activity and it varies inversely . In other words, on a per unit basis, a variable cost is fixed and a fixed cost is variable. Does this make sense to you?
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Chapter 12 Comments 8th ed - Instructor Comments Chapter...

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