Anthony Burkhardt's Ch22-PowerPoint(first half)

Chapter 22 1 how costs behave on a total and per unit

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Unformatted text preview: classes taught (by a Dance studio) Choose an activity that causes chnages in the behavior of costs. Chapter 22-1 HOW COSTS BEHAVE ON A TOTAL AND PER-UNIT BASIS IN TOTAL Variable Changes Changes proportionately Cost PER UNIT Remains the same [Illustration 22-1, (b) graph] with changes in the activity level. the [Illustration 22-1, (a) graph] Fixed Cost Remains the same Changes inversely [Illustration 22-2, (a) graph] with changes in the activity level [Illustration 22-2, (b) graph] (More of a linear relationship) Chapter 22-2 Relevant Range Relevant Range Relevant De fine d a s th e ra ng e o f a c tivity o ve r wh ic h a c o m p a n y De expects to operate during a year Within this range, a straight­line relationship usually exists for both Variable and Fixed costs Chapter 22-3 Mixed Costs Mixed Costs Mixed Costs that have both a va ria b le c o s t both e le m e n t a n d a fixe d c o s t e le m e nt S o m e tim e s c a lle d semi variable cost l Change in total but not proportio...
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