Presented below is a list of terms relating to cost behavior, followed by definitions of those terms:
a. Rent on a factory building
b. Engineering approach
c. Fixed cost
d. High-low method
e. Direct material
f. Mixed cost
g. Relevant range
h. Scatter graphing
i. Regression analysis
j. Variable cost
k. Microsoft Data Graph
l. Excel
m. Microsoft Word
Required: Match the letter next to each term on the list with the appropriate definition.
Each letter will be used only once.
1. A cost that changes in total proportionately with changes in the activity level
2. A method used to separate a mixed cost into its fixed and variable components by plotting historical activity and cost data to see how a cost relates to various levels of activity
3. An individual cost that has both fixed and variable cost components
4. The activity levels within which cost behavior assumptions are valid
5. A method used to separate a mixed cost into its fixed and variable components using complex mathematical formulas .
6. A software program useful for plotting mixed costs
7. A method used to separate a mixed cost into its fixed and variable components using the knowledge of experts
8. An example of a variable cost
9. A method used to separate a mixed cost into its fixed and variable cost components using the mathematical differences between just two levels of activity and cost
10. A cost that remains constant in total regardless of activity level