1. Describe how total variable costs and unit variable
costs behave with changes in the level of activity.
2. Which of the following costs would be classified as
variable and which would be classified as fixed, if
units produced is the activity base?
a. Direct materials costs
b. Electricity costs of $0.35 per kilowatt-hour
3. Describe how total fixed costs and unit fixed costs
behave with changes in the level of activity.
4. In applying the high-low method of cost estimation,
how is the total fixed cost estimated?
5. If fixed costs increase, what would be the impact on the
(a) contribution margin? (b) income from operations?
6. An examination of the accounting records of
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