1. Distinguish between (a) a variable cost, (b) a fixed cost, and (c) a mixed cost

2. What effect does an increase on volume have on:

(a) Unit fixe cost

(b) Unit variable costs

(c) Total fixed cost

(d) Total variable costs

3. Define the following (a) cost behaviour and (b) relevant range

4. What is meant by an activity base when dealing with variable costs? Give several

examples of activity bases.

5. Distinguish between discretionary fixed costs and committed fixed costs

6. Classify the following fixed costs as normally being either committed or discretionary:

(a) Depreciation on building

(b) Advertising

(c) Research

(d) Long-term equipment leases

(e) Pension payments to the companys retirees

(f) Management development training

7. Does the concept of the relevant range apply to fixed costs? Explain

8. What is the major disadvantage of the high-low method?

9. Give the general formula for mixed costs. Which term represents the variable cost?

The fixed cost?

10. What is meant by the term least-squares-regression?