1. Many costs can be easily classified as variable or fixed. Mixed costs are generally analyzed (via High/Low method, Least squares method, scattergraph) to determine the fixed and variable components. You are assisting management in the preparation of operational goals for next year. You note that mixed costs were less than 3% of total costs. Would you recommend that mixed cost be analyzed to determine the fixed and variable components? Not analyze the mixed costs? If not, what?

4. What is the difference between the cost per unit of inventory under absorption (full) costing and variable costing? Assume that a company has zero units of beginning finished goods inventory, produces 10,000 units during the current period, and sells 8000 units during the period.