Total variable costs? 1–6 Define the following terms: (a) cost behavior and (b) relevant range. 1–7 What is meant by an activity base when dealing with variable costs? Give several examples of activity bases. 1-8 Managers often assume a strictly linear relationship between cost and the level of activity.
How can this practice be defended in light of the fact that many costs are curvilinear? 1-9 Distinguish between discretionary fixed costs and committed fixed costs. 1-10 Does the concept of the relevant range apply to fixed costs? Explain. 1-11 What is the difference between a traditional format income statement and a contribution format income statement? 1-12 1–13 What is the contribution margin? Define the following terms: differential cost, sunk cost, and opportunity cost. Only variable costs can be differential costs. Do you agree? Explain. 1-14. Get Accounting homework help today
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