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Cost Accounting A Managerial Emphasis Study Set 1
Quiz 10: Analysis of Cost Behaviour
A Linear Cost Function Is a Function in Which the Graph
Question 1
True False
A linear cost function is a function in which the graph of total costs versus a single cost driver forms a straight line, within the relevant range.
True
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Q 2
When estimating linear cost functions, it is assumed that variations in total cost of a cost object cannot be explained by variations in a single cost driver.
Q 3
A mixed cost has a fixed element.
Q 4
Correctly identifying the cost driver and separating fixed from variable costs are important inputs for many management decisions.
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