Renae Accounting Final

Variable costs remain _____ in total within the relevant range of activity

Fixed

A method that uses all the available data points to divide a mixed cost into its fixed and variable components is called

Least-squares regression

Within the relevant range of activity, variable costs ____ per unit and _____ in total

Remain constant, vary

Fixed costs remain constant in ____ over the ____ range of activity

Total; relevant

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

discretionary

The materials that go into the final product are called ____ materials

raw

Cost assumptions are reasonable valid within the _____ _____ of activity

relevant range

The relevant range of activity is approximated by a _____ line

straight

when using account analysis, an account is classified as either fixed or variable based on

the analyst's prior knowledge of how the cost behaves

period costs are always expensed on the income statement in the period which

they are incurred

Using the high-low method, fixed cost is calculated by

using either the high or low level of activity after the variable cost per unit is calculated

A cost that changes in direct proportion to changes in the activity level is a _____ cost

variable

Presenting fixed costs on an average per unit basis makes them look like they are _____ costs

variable

The slope (b) of the regression line represents the ____ cost per unit of activity

variable

When using the high-low method, the slope of the line equals the ____ cost per unit of activity

variable

When using the high low method, the change in the cost divided by the change in units equals

variable cost per units

When using the high-low method, fixed costs are calculated after ____ are determined

variable costs

Inventorial costs is another term for _____ costs

product

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

behavior

Managers use cost _____ to predict how costs will change as the level of activity changes

behavior

The variable cost per unit using the high-low method is calculated as

change in the cost divided by the change in units (activity)

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

cost structure

Manufacturing costs can be divided into three categories:

direct materials direct labor manufacturing overhead

Within the relevant range of activity, _____ costs remain constant in total

fixed

Within the relevant range, fixed costs

generally include rent and supervisor salaries should not be expressed on a per unit basis when making decisions remain constant in total regardless of changes in activity

Engineering cost approach

includes an analysis of what cost behavior should be is based on an engineers evaluation of the production methods

Manufacturing over head costs include

indirect materials, factory supervisors salaries, and factory depreciation

Common activity bases include

machine hours, unit sold, direct labor hours

Indirect materials and indirect labor are classified as

manufactoring overhead

Step-variable costs

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

Both fixed and variable cost elements are contained in a _____ cost

mixed