9.Costs will not change in total within the relevant range of activity. 10.The high-low method is used in classifying a mixed cost into its variable and fixed elements. 19 - 5
Test Bank for Financial and Managerial Accounting 11.A mixed cost has both selling and administrative cost elements. 12.The fixed cost element of a mixed cost is the cost of having a service available. 13.For planning purposes, mixed costs are generally grouped with fixed costs. 14.The difference between the costs at the high and low levels of activity represents the fixed cost element of a mixed cost. 15.When applying the high-low method, the variable cost element of a mixed cost is calculated before the fixed cost element. 16.An assumption of CVP analysis is that all costs can be classified as either variable or fixed. 17.In CVP analysis, the term “cost” includes manufacturing costs, and selling and administrative expenses. 18.Contribution margin is the amount of revenues remaining after deducting cost of goods sold.
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