C (DOSSS# BBBEee

: Wr

fixed costs

constant at all activity can be mitted that can't be avoided

levels aka do not change costs locked in by past decisions
-

>
- -

rent , property taxes , insurance it. Long-term purchase of equipment results in depreciation to
-

asset like
-

admin salaries allocate cost over useful life

utilities excl . used in production -

if #2 . Property taxes not change due to management decision

depreciation -

can bed
rationary - >
planned costs that can be
changed
-

advertising -

if . research + development

research + development ie #2 advertising

-
-
.

factory management salaries

total fixed costs remain ant as activity ! fixed costs per unit dease as activity !

variable costs

Costs that change in proportion to activity level Step variable costs increase incremently
- -

units produced that change based units sold I nurse for 20 patients
i

UC change based on VO on . .
e nurses have

-
direct + indirect materials -

Cogs 20 patrons = $25 VC

-
direct labour -
sales comissions 40 patrons = $50 UC

shipping costs 60 patrons =

$75 VC

total Variable costs ↑ as

activity variable costs per unit remain constant as
activity -

mixed costs contribution margin

have both fixed and variable components -

unit level =
selling price -
unit variable costs

↳ ie . Taxi's charges fixed" rate +

W
distance traveled
-

Overall level = sales revenue -

variable costs

-
regression
method scattergraph high-low
analysis

=
calculated
calculation is
calculated
process by slope
Precise
from drawn from 2 data
line points

quick +
uses all data
advantages Uses all
easy
data
-

different only uses 2 computer or

Calculator with
disadvantages result for data points
different Certain functions
users needed