Quiz 21: Cost Behavior Andcost-Vo Ume-Profit Analysis

Business

Ethical Considerations An ethical consideration involves an act of informing a prospective investor about all possible information in the prospectus. Further, it involves highlighting all the major risk factors in the prospectus in a simple language. The act of Edward Seymour shall be considered unethical. This is due to following reasons -: 1. All risk information is not highlighted; 2. The information on increased project cost is not given in simple language thereby misleading small investors.

Total variable costs vary in direct proportion to changes in the level of activity. Unit variable costs remain the same with changes in the level of activity.

Fixed costs are the cost which remain same even when the activity base changes. Straight line depreciation is one of the example of fixed cost. Mixed Costs are costs which are also known as semi variable costs. They have features of both fixed cost and variable cost. Variable costs are the cost which increase/ decrease proportionately with change in activity level. Classification of Cost 1. Fixed cost as the taxes won't change due to change in activity. 2. Fixed cost as they won't change due to change in activity. 3. Variable cost as the requirement shall change as quantity produced changes. 4. Variable cost as the requirement shall change as quantity produced changes. 5. Fixed cost as they won't change due to change in activity. 6. Variable cost as the requirement shall change due to change in activity level. 7. Variable cost as the requirement shall change due to change in activity level. 8. Variable cost as the requirement shall change due to change in activity level. 9. Fixed cost as they won't change due to change in activity. 10. Fixed cost as they won't change due to change in activity. 11. Fixed cost as they won't change due to change in activity. 12. Mixed Cost as it is fixed and variable. 13. Fixed cost as they won't change due to change in activity. 14. Variable cost as the requirement shall change due to change in activity level. 15. Mixed Cost as it is fixed and variable.