Use this lecture outline/guide to add notes from your reading under each topic. Include references to examples, exercises and problems that illustrate the concept.

1. Define each of the following terms:
   1. Variable cost
   2. Fixed cost
   3. Mixed cost

1. List an example of each type of cost described in #1 and explain how your example fits the definition.

1. Describe the high-low method for estimating fixed and variable costs.

1. Provide a numerical example of using the high-low method to determine the variable and fixed component of a cost. Use an example from the text, practice problem or make up your own.

1. Copy a CVP graph from the text or one you prepared for a homework problem here. Describe what each line represents and the what the points where the lines intersect tell you. (For example, the intersection of sales and total cost lines is the breakeven point.)

1. Define contribution margin and how it can be used in decision-making.

1. Provide the formula for calculating the contribution margin per unit.

1. Include an example that shows how to calculate contribution margin per unit. You can make one up, or use one from the text or practice problems.

1. Illustrate how to calculate contribution margin as a % (ratio).

1. Include an example here on how to calculate breakeven point in both units and dollars. You can make one up, or use one from the text or practice problems.

1. Define what is meant by a target profit. Describe how the units and sales dollars needed to reach a target profit can be determined.

1. Include an example of the computation of units and sales dollars needed to reach a particular target profit amount. Take an example from the textbook, use a practice problem or make up your own example.

Answer rating: 100% (QA)

Variable Cost Definition Variable costs are expenses that change in proportion to the level of production or sales These costs vary with the volume of goods or services produced Example Direct materia... View the full answer