Module Four

total prime cost for the month of September was $____

133,000

total variable manufacturing cost for the month of july was:

141,000

total product cost for the month of September was $____

195,000

total period cost for the month of September was $____

58,000

total fixed cost for the month of July was

63,000

How individual costs react to changes in activity level is referred to as cost _____.

Behavior

Fixed costs that usually arise from annual spending decisions by management are ____ costs.

Discretionary

true or false: presenting fixed costs on an average per unit basis make them look like they are variable costs.

True

Common activity bases include:

Units sold Direct Labor Hours Machine Hours

Step-variable costs:

can be adjusted quickly as conditions change may include total salaried employee expense

fixed costs that cannot easily be changed and often lock a company into a multi-year decision are ____ fixed cost

comitted

which of following are differences between the traditional and contribution format to income statements?

compared to traditional statements, contribution format statements provide management with a tool to make decision making easier traditional income statements focus on cost classifications. Contribution format statements focus on cost behavior

sales revenue minus variable revenue equals ____ ____

contribution margin

The relative proportion of each type of cost in an organization is known as the company's ___ ___

cost structure

the contribution approach to constructing income statements:

distinguishes between fixed and variable costs aids in decision making

true or false: variable costs remain fixed in total within the relevant range of activity

false

within the relevant range of activity, ____ costs remain constant in total

fixed

variable costs vary ____ within the relevant range

in total

As the level of activity moves outside of the relevant range, fixed costs:

increase or decrease in discrete steps

an activity base:

measures whatever causes cost to vary is sometimes called a cost driver

a cost that contains both variable and fixed cost elements is a(n) ____ cost

mixed

committed fixed costs include:

real estate taxes top management salaries

the level of activity within variable and fixed cost assumptions are valid is known as the ____ ____.

relevant range

variable costs:

remain constant per unit and vary in total

in the equation Y=a+bX, b denote the

slope of the line variable cost per unit of activity

an income statement focusing on product and period costs has been prepared using a ____ format, while a(n) format income statement makes a distinction between fixed and variable costs

traditional ; contribution

which type of cost changes in total, in direct proportion to changes in activity level?

variable

within the relevant range, ____ costs remain constant on a per unit basis

variable

within the relevant range of activity, variable costs:

vary in total remain constant per unit

total conversion cost for the month of July was

95,000