Term
| Variable Cost: Activity Level? Per Unit? |
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Definition
| It increases in direct proportion in changes in the activity level and remains constant on a per unit basis. |
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Term
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Definition
| is a measure of whatever causes the incurrence of variable cost. |
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Term
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Definition
| Costs that are only obtainable in large chunks |
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Term
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Definition
| the range of activity within which the assumptions made about cost behavior are reasonably valid. |
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Term
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Definition
Investments in facilities, equipment, and the basic organization that can't be significantly reduced even for short periods of time without making fundamental changes.
EX: Depreciation, Insurance, real estate taxes. |
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Term
| Discretionary Fixed Costs |
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Definition
usually arise from annual decisions by management to spend on certain fixed cost items.
EX: Advertising, Research, PR |
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Term
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Definition
Y=The Total Mixed Cost
a=The total fixed cost
b=the variable cost per unit of activity
X=the level of activity |
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Term
| Scatterplot Yaxis? Xaxis? |
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Definition
| Cost is on the Y; Activity is on the X |
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Term
| Defects of the High-Low Method (2) |
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Definition
-Uses only two data points
-the high and the low data points may be unusual. |
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Term
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Definition
| "goodness of fit" ranges from 0-100 and tells us if the data is correlated in Least-Squares regression Method |
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