0
What else can I help you with?
Will total variable costs increase if the level of activity increases within the relevant range?
yes
What happens Cost driver activity level increases within the relevant range?
total fixed costs remain unchanged
Which costs decrease in activity within the relevant range?
Within the relevant range, variable costs decrease per unit as production volume increases, due to the spreading of fixed costs over a larger number of units. Additionally, economies of scale may lead to lower average costs as production increases, often resulting in decreased costs for materials or labor per unit. However, total fixed costs remain constant within this range, since they do not change with the level of activity.
How would you describe an activity-based budget?
Activity-based budgeting is a technique that focuses on costs of activities or cost drivers necessary for production and sales. Such an approach facilitates continuous improvement.
What is the importance of cost behavior.?
Cost behaviour is associated with learning how costs change when there is a change in an organization's level of activity. The costs which vary proportionately with the changes in the level of activity are referred to as variable costs. The costs that are unaffected by changes in the level of activity are classified as fixed costs. The understanding of cost behaviour is very important for management's efforts to plan and control its organization's costs. Budgets and variance reports are more effective when they reflect cost behaviour patterns. The understanding of cost behaviour is also necessary for calculating a company's break-even point and for any other cost-volume-profit analysis.
Describe the behavior of total fixed costs as the level of activity increases?
as activity increases fixed costs per unit tend decrease, however the total fixed cost in a company behaves like a flight of stairs. it remains constant within a certain range as activity increase then jumps to a new level in a parallel line to the older one for a new range that is to be determined by the size of the fixed asset expansion as well as how much excess capacity the company wishes to keep
A cost increases or decreases in intervals as activity changes?
This scenario likely represents a step-variable cost behavior, where costs remain constant within certain activity levels before increasing or decreasing in response to a change in activity. This type of cost behavior is characterized by step changes in costs instead of a continuous increase or decrease. Organizational decisions may need to account for these step changes when forecasting or managing costs.
Will total variable costs increase if the level of activity increases within the relevant range?
yes
What happens Cost driver activity level increases within the relevant range?
total fixed costs remain unchanged
Which costs decrease in activity within the relevant range?
Within the relevant range, variable costs decrease per unit as production volume increases, due to the spreading of fixed costs over a larger number of units. Additionally, economies of scale may lead to lower average costs as production increases, often resulting in decreased costs for materials or labor per unit. However, total fixed costs remain constant within this range, since they do not change with the level of activity.
How would you describe a budgeted cost?
Budgeted costs are generally described as the best estimate about what should be allowed for forthcoming activity.
How would you describe an activity-based budget?
Activity-based budgeting is a technique that focuses on costs of activities or cost drivers necessary for production and sales. Such an approach facilitates continuous improvement.
How would you describe an activity based budget?
Activity-based budgeting is a technique that focuses on costs of activities or cost drivers necessary for production and sales. Such an approach facilitates continuous improvement.
What are the stages of accounting for costs?
direct costs,indirect costs,sunk costs, Activity based costing.
What is the importance of cost behavior.?
Cost behaviour is associated with learning how costs change when there is a change in an organization's level of activity. The costs which vary proportionately with the changes in the level of activity are referred to as variable costs. The costs that are unaffected by changes in the level of activity are classified as fixed costs. The understanding of cost behaviour is very important for management's efforts to plan and control its organization's costs. Budgets and variance reports are more effective when they reflect cost behaviour patterns. The understanding of cost behaviour is also necessary for calculating a company's break-even point and for any other cost-volume-profit analysis.
Why does the costs increase as output increases?
Costs increase as output increases due to the concept of economies of scale. Initially, as production increases, costs per unit decrease as fixed costs are spread out. However, eventually, diminishing returns set in, causing costs to rise as more resources are needed to produce each additional unit.
The law of increasing costs means that when an economy increases the production of one item .?
what law of increasing costs means that when an economy increases the production of one item _____.
