Chapter 5: Cost Behavior: Analysis And Use

 
Created Jun 13, 2011
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katchung
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Account analysis
a metiod for analyzing cost behavior in which an account is classified as wither VC or FC based...
activity base
a measure of whatever causes the incurrence of a VC.
committed fixed costs
investments in facilities, equipment, and basic organizational structure that can't be significantly...
contribution approach
an income statement format that organizes costs by their behavior.  costs are separated...
contribution margin
the amount remaining from sales revenues after all variable expenses have been deducted
cost structure
the relative proportion of fixed, variable, and mixed costs in an organization
dependent variable
a variable that responds to some casual factor; total cost is the dependent variable, as represented...
discretionary fixed costs
those FC that arise from annual decisions by management to spend on certain FC items, such...
engineering approach
a detailed analysis of cost behavior based on an industrial engineer's evaluation of the inputs...
high-low method
a method of separating a mixed cost into its FC and VC elements by analyzing the change in...
independent variable
a variable that acts as a casual factor; activity is the independent variable as represented...
least-squares regression method
a method of separating a mixed cost into its fixed and variable elements by fitting a regression...
linear cost behavior
cost behavior is said to be linear whenever a straight line is a reasonable approximation for...
mixed cost
a cost that contains both VC and FC elements
Multiple regression
an analytical method required when variations in a dependent variabble are caused by more than...
R2 (R squared)
a measure of goodness of fit in least-squares regression analysis.  it is the percentage...
relevant range
the range of activity within which assumptions about VC and FC behavior are reasonably valid
step-variable cost
the cost of a resource that is obtained in large chunks and that increases and decreases only...


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