a) There is no such thing as a fixed cost - depending on how long it is your time horizon all costs may become variable'. Do you agree? What is the implication of your answer for CVP analysis?

b) Define cost object. Describe with an example how a given cost item can be both a direct cost and an indirect cost.

c) Define relevant costs and discuss: (1) whether all future costs are relevant for decision making and (2) whether variable costs are always relevant and fixed costs are always irrelevant.

Answer rating: 100% (QA)

a In the long run all cost are variable There is no fixed cost Cost Volume Profit analysis involves ... View the full answer