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8 Cards in this Set
- Front
- Back
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Cost Behavior |
The way cost changes in relation to a change in business activity |
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Variable Cost |
Costs that vary in direct proportion |
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Fixed Costs |
Costs that remain constant |
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Relevant |
Cost Behavior is valid only within a level of activity called the _____ |
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Committed fixed costs |
Cannot be eliminated easily and are associated with long range investments in the plant, equipment, and business itself |
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Discretionary fixed Costs |
Usually based on decisions for one accounting period and can be increased or decreased during the annual budgeting process |
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Mixed costs |
Costs that cannot be explained by a single cost Behavior pattern |
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High low method |
This method is used to separate mixed costs into variable and fixed components |
