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Cost Accounting 15e by Horngren Datar Rajan Chapter 02 An Introduction To Cost Terms and Purposes
Cost Accounting 15e by Horngren Datar Rajan Chapter 02 An Introduction To Cost Terms and Purposes
Change
Change
inversely
inversely with
with
Fixed Costs Unchanged in
output
output
relation to output
Unchanged in
Fixed Costs More
More output
output == lower
lower
relation to output costcost
per unit
per
unit
Copyright © 2015 Pearson Education, Inc. All Rights Reserved
2- 13
Copyright © 2015 Pearson Education, Inc. All Rights Reserved
2- 14
Cost driver—a variable, such as the level of
activity or volume, that causally affects costs
over a given time span.
Relevant range—the band or range of normal
activity level (or volume) in which there is a
specific relationship between the level of
activity (or volume) and the cost in question.
Forexample, fixed costs are considered fixed
only within the relevant range.