Exam2 - Flashcards - The flashcards are formatted for...

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Activity Base Total Variable Cost
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Cost proportional to the activity level within the relevant range. A measure of what causes the incurrence of a variable cost.
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Unit Variable Cost Activity Base
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i.e. units produced, machine hours, labor hours, or miles driven Cost that remains the same over a wide range of activity.
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Many Fewer
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A public utility with large investments in equipment will tend to have ____ variable costs. A manufacturing company will often have ____ variable costs.
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A high proportion of A high proportion of
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A service company will normally have ____ variable costs. A merchandising company usually will have ____ of variable costs (i.e. cost of sales).
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Total Fixed Cost Direct Materials
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A true or proportionately variable cost because the amount used during a period will vary in direct proportion to the level of production activity. Costs that remains the same even when the activity level changes within the relevant range.
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Committed Unit Fixed Cost
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Cost that goes down as activity level goes up.
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