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8 Cards in this Set

  • Front
  • Back

Cost Behavior

The way cost changes in relation to a change in business activity

Variable Cost

Costs that vary in direct proportion

Fixed Costs

Costs that remain constant


Cost Behavior is valid only within a level of activity called the _____

Committed fixed costs

Cannot be eliminated easily and are associated with long range investments in the plant, equipment, and business itself

Discretionary fixed Costs

Usually based on decisions for one accounting period and can be increased or decreased during the annual budgeting process

Mixed costs

Costs that cannot be explained by a single cost Behavior pattern

High low method

This method is used to separate mixed costs into variable and fixed components