【正文】 ilinear Cost Function A straight line closely approximates a curvilinear variable cost line within the relevant range. 169。 The McGrawHill Companies, Inc., 2023 Irwin/McGrawHill Cost Behavior Variable costs are usually characterized by: a. Unit costs that decrease as activity increases. b. Total costs that increase as activity decreases. c. Total costs that increase as activity increases. d. Total costs that remain constant. 169。 The McGrawHill Companies, Inc., 2023 Irwin/McGrawHill Fixed Cost Per Unit Number of Local Calls Monthly Basic Telephone Bill per Local Call The average cost per local call decreases as more local calls are made. 169。 The McGrawHill Companies, Inc., 2023 Irwin/McGrawHill Cost Classifications for Predicting Cost Behavior How a cost will react to changes in the level of business activity. ?Total variable costs change when activity changes. ?Total fixed costs remain unchanged when activity changes. 169。 The McGrawHill Companies, Inc., 2023 Irwin/McGrawHill Manufacturing costs that cannot be traced directly to specific units produced. Manufacturing Overhead Examples: Indirect labor and indirect materials Wages paid to employees who are not directly involved in production work. Examples: maintenance workers, janitors and security guards. Materials used to support the production process. Examples: lubricants and cleaning supplies used in the automobile assembly plant. 169。 The McGrawHill Companies, Inc., 2023 Irwin/McGrawHill Manufacturing Cost Concepts Financial Accounting Cost is a measure of resources used or given up to achieve a stated purpose. Managerial Accounting Product costs are the costs a pany assigns to units produced. 169。 The McGrawHill Companies, Inc., 2023 Irwin/McGrawHill The Product Direct Materials Direct Labor Manufacturing Overhead Manufacturing Costs 169。 The McGrawHill Companies, Inc., 2023 Irwin/McGrawHill Classifications of Costs Direct Materials Direct Labor Manufacturing Overhead Prime Cost Conversion Cost Manufacturing costs are often bined as follows: 169。 The McGrawHill Companies, Inc., 2023 Irwin/McGrawHill Total Variable Cost Your total long distance telephone bill is based on how many minutes you talk. Minutes Talked Total Long Distance Telephone Bill 169。 The McGrawHill Companies, Inc., 2023 Irwin/McGrawHill Cost Classifications for Predicting Cost Behavior B e h a v i o r o f C o s t ( w i t h i n t h e r e l e v a n t r a n g e )C o s t I n T o t a l P e r U n i tV a r i a b l e T o t a l v a r i a b l e c o s t c h a n g e s V a r i a b l e c o s t p e r u n i t r e m a i n sa s a c t i v i t y l e v e l c h a n g e s . t h e s a m e o v e r w i d e r a n g e so f a c t i v i t y .F i x e d T o t a l f i x e d c o s t r e m a i n s F i x e d c o s t p e r u n i t g o e st h e s a m e e v e n w h e n t h e d o w n a s a c t i v i t y l e v e l g o e s u p . a c t i v i t y l e v e l c h a n g e s .169。 The McGrawHill Companies, Inc., 2023 Irwin/McGrawHill Variable costs are usually characterized by: a. Unit costs that decrease as activity increases. b. Total costs that increase as activity decreases. c. Total costs that increase as activity increases. d. Total costs that remain constant. Cost Behavior 169。 The McGrawHill Companies, Inc., 2023 Irwin/McGrawHill Types of Fixed Costs Fixed Costs Discretionary May be altered in the shortterm by current managerial decisions Committed Longterm, cannot be reduced in the short term. Examples Depreciation on Buildings and Equipment Examples Advertising and Research and Development 169。 The McGrawHill Companies, Inc., 2023 Irwin/McGrawHill How does this type of fixed cost differ from a stepvariable cost? Stepvariable costs can be adjusted more quickly and . . . The width of the activity steps is much wider for the fixed cost. Fixed Costs and Relevant Range 169。 The McGrawHill Companies, Inc., 2023 Irwin/McGrawHill Fixed Monthly Utility Charge Variable Utility Charge Activity (Kilowatt Hours) Total Utility Cost Mixed Costs bX a X