Chapter 21, Problem 2E

To determine

Cost behavior analysis :

Cost behavior analysis means to study how the cost changes as the level of volume changes. Sometimes it may be fixed, it may be variable, it may be constant at certain level etc.

To Match

In the given question we have to match cost classifications in left side column with the definitions given in right side column.

Given Info:

Left side column:

1. Total cost
2. Mixed cost
3. Variable cost
4. Curvilinear cost
5. Step-wise cost
6. Fixed cost

Right side column:

1. This cost is the combined amount of all the other costs.
2. This cost remains constant over a limited range of volume; When it reaches the end of its limited range, it changes by a lump sum and remains at that level until it exceeds another limited range.
3. This cost has a component that remains the same overall volume levels and another component that increases in direct proportion to increases in volume.
4. This cost increases when volume increases, but the increase is not constant for each unit produced.
5. This cost remains constant overall volume levels within the productive capacity for the planning period.
6. This cost increases in direct proportion to increases in volume; its amount is constant for each unit produced.

Match:

Left Column   Right Column

A      1
B      3
C      6
D      4
E      2
F      5