EXAM_2_STUDY_GUIDE

# EXAM_2_STUDY_GUIDE - EXAM 2 STUDY GUIDE= Chapter 5Cost...

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EXAM 2 STUDY GUIDE= Chapter 5- Cost classifications/cost behavior patterns= 1. variable= a cost which varies in total but not per unit 2. fixed= a cost which is constant in total but varies per unit 3. mixed= a cost which has characteristics of both variable and fixed EX. Base fee with additional per unit fees as well Activity base= a measure of what causes the change in variable costs Aka= dependent variable or cost driver Types of variable costs: 1. True VC= VC as we already know it 2. Step-variable= a cost that only increases or decreases due to wide changes in activity =bracket costing of electricity kind of Relevant range= range of activity in which shit is valid Types of fixed costs= Committed FC= long term FC Discretionary FC= decided on a yearly basis, more short term -usually not too significant to the whole Mixed costs= Total mixed cost= total FC + VC per unit(# of units) Y=a+ bX The high low method (for estimating mixed costs and determining VC and FC): VC= slope=rise/run= cost at highest activity level-lowest/high activity units-low units

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EXAM_2_STUDY_GUIDE - EXAM 2 STUDY GUIDE= Chapter 5Cost...

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