Page 11 - PowerPoint Presentation

RECAP

Cost Terms And Concepts

• Based on the reaction to changes in activity level,

costs fall into one of the following classifications:

• Fixed cost

• Variable cost

• Semi-variable cost

• Semi-fixed, also called stepped fixed cost

• Fixed cost is a cost that remains constant, in total,

regardless of changes in the level of activity or

volume within the relevant range and in a specific

time frame

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