COMM 305 Study Guide - Final Guide: Direct Labor Cost, Accounts Payable, Management Accounting

• School: Concordia University
• Department: Commerce
• Course: COMM 305
• Professor: Ibrahim Aly

Document Summary

Extend beyond double-entry accounting to any relevant data. Variable costs are costs that vary in total directly and proportionally with changes in activity level. Direct materials & direct labor for a manufacturer. A variable cost may also be defined as: a cost that remains the same activity. per unit at every level of. Fixed costs are costs that remain the same in total within the relevant range regardless of changes in the activity level. Because total fixed costs remain constant as activity changes, it follows that fixed costs per unit vary inversely with activity. As volume increases, unit cost declines, and vice versa. The high-low method uses the total costs incurred at the high and low levels of activity. The steps in calculating fixed and variable costs under this method are: Determine the variable cost per unit by using this formula: The high and low levels of activity are 100,000 in april and 40,000 in january.