ADM2341 Chapter 6 Cost Behaviour

Variable cost per unit remains the same over wide

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Unformatted text preview: Total fixed cost remains the same even when the activity level changes within the relevant range. Fixed cost per unit goes down as activity level goes up. Fixed LO 1 6-16 Total Fixed Cost Example Monthly Basic Telephone Bill A fixed cost is a cost whose total dollar amount remains constant as the activity level changes. Your monthly basic telephone bill is probably fixed and does not change when you make more local calls. Number of Local Calls LO 1 6-17 Types of Cost Behaviour Patterns Recall the summary of our cost behaviour Recall discussion from an earlier chapter. discussion Summary of Variable and Fixed Cost Behaviour Cost In Total Per Unit Variable Total variable cost is proportional to the activity level within the relevant range. Variable cost per unit remains the same over wide ranges of activity. Total fixed cost remains the same even when the activity level changes within the relevant range. Fixed cost per unit goes down as activity level goes up. Fixed LO 1 6-18 Fixed Cost Per...
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This note was uploaded on 01/27/2014 for the course ADM 2341 taught by Professor Managerialaccounting during the Winter '07 term at University of Ottawa.

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