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When cost behavior is discussed

When cost behavior is discussed - of fixed cost and...

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When cost behavior is discussed, an assumption must be made about operating levels. At certain  levels of activity, new machines might be needed, which results in more depreciation, or overtime  may be required of existing employees, resulting in higher per hour direct labor costs. The definitions 
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Unformatted text preview: of fixed cost and variable cost assumes the company is operating or selling within the relevant range (the shaded area in the graphs) so additional costs will not be incurred....
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