COMMERCE 2AB3 Study Guide - Midterm Guide: Cost Driver, Break Even, Variable Cost

• School: McMaster University
• Department: Commerce
• Course: COMMERCE 2AB3
• Professor: Mohamed Shehata

Document Summary

Examples of variable, fixed, mixed, increasing at increasing rate, increasing at decreasing rate, free then charging, etc. Manufacturing or production (product or inventoriable): dm, dl, vmoh, fmoh. Selling or period (expensed in income statement): vs&a, fs&a. See tutorial 1 for examples on each category of cost. No they are period, variable and indirect costs because they fall under vs&a. Yes when the products get sold to generate revenues, they convert from fg inventory to cogs which is an expense (according to matching principle) Uvc remains constant e. g. per litre of gas no matter how many litres you pump. Tvc increases if level of activity increases eg. gas bill goes up the more you pump. Ufc decreases if level of activity increases eg. if rent of room is for one hour and one person comes then it is per person but if 10 people come it is per person.