Activity based costing is likely a more advantageous costing methold versus traditonal costing, to facilliate which of the following type of analysis?  a) analysis of service organization cost b) analysis of channel profitablity c) analysis of long term profitablity d) analysis for reduction selling price of all products?  2. A ___ is any factor that causes a change in the cost of an activity.  a) activity based cost  b) cost pool  c) cost driver  d) standard   3. Which of the following is no a basic c

Describe the differences in behavior of fixed costs, variable costs, semi-variable costs and step costs. Then discuss how break-even analysis and contribution margin can be useful in making business decisions.

Cost-volume-profit analysis is used to make many decisions, including product pricing and controlling costs. What are the limitations of using operating leverage to predict profitability?

Contribution Margin, Cost-Volume-Profit Analysis and Break-Even Point (Overview) Fixed, Variable and Mixed Costs An appreciation of cost behavior is needed in order for management to understand and predict profitability as the costs of material, labor and other operating expenses and levels of production and sales change. It's important to review the cost behavior of fixed, variable and mixed costs before contribution margins, cost-volume-profit analysis, and break-even points. 1.   In the table below, Have-A-Seat Inc. has outlined many of the costs associated with producing office chairs. With respect to the production and sale of office chairs, classify each cost as fixed, mixed, or variable. a.  Pressure-molded plastic for chair frames   b.  Pension cost: $0.50 per employee hour on the job   c.  Insurance premiums for inventory: $2,100 per month plus $0.01 for each dollar of inventory over $2 million   d.  Property taxes: $120,000 per year for the factory building and…

7. Which of the following is the best definition of a variable cost? A. A variable cost is one which is directly traceable to an activity of the business for which the cost will be used. B. A variable cost is one which is associated with goods or services purchased, or produced, for sale to customers. C. A variable cost is one which changes with changes in the level of activity, over a defined period of time. D. A variable cost is one which is spread over a number of activities of the business for which costs are to be determined.