What is the definition of cost behavior in the context of managerial accounting? Cost behavior is the process of allocating costs to different departments. Cost behavior is the method of calculating total production costs. Cost behavior refers to the fixed nature of costs regardless of activity level. Cost behavior is defined as the manner in which costs respond to changes in volume or activity.

Cost behavior is defined as the manner in which costs respond to changes in volume or activity.

Is it true that total variable and fixed costs remain the same regardless of the number of units produced? True, as both costs are independent of production levels. False, because fixed costs change with production levels. False, because variable costs change with the level of production. True, because total costs are always constant.

False, because variable costs change with the level of production.

Do fixed costs always remain constant regardless of the level of production? True, but only in the short term. False, fixed costs vary with production levels. True, fixed costs do not change with production levels. False, fixed costs are variable in nature.

True, fixed costs do not change with production levels.

What is normal capacity in the context of production planning? Normal capacity is the maximum production level achievable under ideal conditions. Normal capacity is the minimum production level required to break even. Normal capacity is the production level that maximizes profit. Normal capacity is the average annual level of operating capacity needed to meet expected sales demand, adjusted for seasonal changes and industry and economic cycles.

Normal capacity is the average annual level of operating capacity needed to meet expected sales demand, adjusted for seasonal changes and industry and economic cycles.

Can regression analysis be used to predict costs using one or more activities? True, but only with a single activity. False, regression analysis is only used for sales forecasting. True, regression analysis can be performed using one or more activities to predict costs. False, regression analysis is not applicable to cost prediction.

True, regression analysis can be performed using one or more activities to predict costs.

Does cost-volume-profit analysis assume a constant sales mix? False, the sales mix is assumed to vary. True, cost-volume-profit analysis assumes a constant sales mix. False, sales mix is irrelevant in cost-volume-profit analysis. True, but only for short-term analysis.

True, cost-volume-profit analysis assumes a constant sales mix.

At the breakeven point, does the contribution margin equal total fixed costs? True, but only in the long term. False, the contribution margin is always greater than fixed costs. False, the contribution margin is less than fixed costs. True, the contribution margin equals total fixed costs at the breakeven point.

True, the contribution margin equals total fixed costs at the breakeven point.

For profit planning purposes, which equation is used to determine target sales units? Target Sales Units = (P - FC) divided by CM per Unit Target Sales Units = CM per Unit divided by (FC + P) Target Sales Units = FC divided by CM per Unit Target Sales Units = (FC + P) divided by CM per Unit

Target Sales Units = (FC + P) divided by CM per Unit

Cost Behavior Analysis: Fixed, Variable and Mixed Costs in Managerial Accounting

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Finance - Personal Finance

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Cards in this deck(16)

What is the definition of cost behavior in the context of managerial accounting?

Is it true that total variable and fixed costs remain the same regardless of the number of units produced?

Do fixed costs always remain constant regardless of the level of production?

What is normal capacity in the context of production planning?

Can regression analysis be used to predict costs using one or more activities?

Does cost-volume-profit analysis assume a constant sales mix?

At the breakeven point, does the contribution margin equal total fixed costs?

If revenue was $120,000,000, variable costs were $90,000,000, and fixed costs were $15,000,000, what was the contribution margin ratio?

If targeted sales are 12,000 units, the sales price per unit is $70, fixed costs are $130,000, and variable costs are $40 per unit, what must the planned profit be?

For profit planning purposes, which equation is used to determine target sales units?

Which statement most accurately explains the behavior of costs?

An insurance company pays its employees a commission of 6% on each sale. What is the proper classification of the cost of sales commissions?

Suppose a company rents a building for $250,000/year for manufacturing between 80,000 and 140,000 units. How will the rental cost per unit behave as production levels increase?

When fixed costs are $18,000 and the contribution margin per unit is $4, what is the breakeven point in units?

If the contribution margin on a new product line is $15, fixed costs are $165,000, and the total market for the product is 22,000 units, what does the breakeven analysis recommend?

Identify the following as fixed costs (FC), variable costs (VC), or mixed costs (MC): Direct materials, shipping expense, electricity, insurance on the factory building, factory building rent, cost of goods sold, advertising expense, direct labor.

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Cost Behavior Analysis: Fixed, Variable and Mixed Costs in Managerial Accounting

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