Textbook Notes (368,566)
Canada (161,966)
Management (865)
MGT223H5 (26)
Minlei Ye (13)
Chapter 06

MGT223 Chapter06:Cost Behaviour Notes

2 Pages
Unlock Document

Minlei Ye

MGT223 Chapter06: Cost Behaviour Cost Driver under activity base is a measure of what causes the incurrence of a variable cost, ex. units produced, machine hours, labour hours, miles driven Variable Cost: in total, varies in direct proportion to changes in the level of activity, but it is constant if expressed on a par unit basis True Variable Cost: direct material is a true or proportionately variable cost because the amount used during a period will vary in direct proportion to the level of production activity Step-Variable Cost: resource that is obtainable only in large chunks (ex, maintenance workers) and whose costs increase or decrease only in response to fairly wide changes in activity Fixed Cost: is constant, in total, regardless of changes in activities within the relevant range, fixed cost per unit react inversely to the number of activities 2 types of fixed cost: - committed: long-term, can’t be significantly reduced in short term, ex. depreciation on equipment and real estate taxes - discretionary: may be altered in short term, ex. advertising and R&D Relevant Range: the range of activities within which the assumption about variable and fixed costs is valid Mixed Cost: contains both fixed and variable components, expressed as Y
More Less

Related notes for MGT223H5

Log In


Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.