FINC 577 Chapter 5 Notes Outline

# Within this range a straight line relationship

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Unformatted text preview: ght-line relationship straight usually exists for both _____________________. Chapter 5-15 Mixed Costs Costs that have both ________ ____________ ____________ and _________ ____________. Sometimes called semivariable cost. Chan Change in total but not proportionately with changes in activity level. Chapter 5-16 Mixed Mixed Costs: High–Low Method High– For purposes of Cost-Volume-Profit (CVP) Cost-Volumeanalysis, mixed costs must be classified into their fixed and variable elements. fi One approach to separate the costs is called the high-low method. Uses the total costs incurred at the high and low levels of activity to classify mixed costs into fixed fixed and variable components. The difference in costs between the high and low levels _______________________, since only variable costs change as activity levels change. Chapter 5-17 Mixed Costs: Steps in High–Low-Method High–LowSTEP 1: Determine variable cost per unit using the following formula: STEP 2: Determine the fixed cost by subtracting the total variable cost at either the high or the low activity level from the total cost at that level. Chapter 5-18 Mixed Mixe...
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