I. Cost behavior defined The left column lists several cost classifications. The right column presents short definitions of those costs. In the blank space beside each of the numbers in the right column, write the letter of the cost best described by the definition. A. Curvilinear cost B. Step-wise cost C. Fixed cost D. Mixed cost E. Variable cost F. Total Cost ____ 1. This cost increases in direct proportion to increases in volume; its amount is constant for each unit produced. ____ 2. This cost remains constant over a limited range of volume; when it reaches the end of its limited range, it changes by a lump sum and remains at that level until it exceeds another limited range. ____ 3. This cost has a component that remains the same over all volume levels and another component that increases in direct proportion to increases in volume. ____ 4. This cost increases when volume increases, but the increase is not constant for each unit produced. ____ 5. This cost remains constant over all volume levels within the productive capacity for the planning period.
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