Exploring Fixed and Variable Costs in Cost Accounting

What are the two main types of costs discussed in managerial accounting?

• Direct and Indirect Costs

• Fixed and Variable Costs

• Product and Period Costs

• Operational and Non-operational Costs

How does the total fixed cost behave when production increases?

• Decreases

• Increases

• Becomes zero

• Stays the same

What happens to the per unit fixed cost when more units are produced?

• Stays the same

• Decreases

• Increases

• Becomes unpredictable

What is the term used to describe costs that do not change with production volume?

• Incremental costs

• Marginal costs

• Fixed costs

• Variable costs

In the example given, what was the fixed cost for Dave's gourmet fudge bars?

• $100,000

• $50,000

• $25,000

• $75,000

What is the behavior of total variable costs as production increases?

• Fluctuates unpredictably

• Remains constant

• Increases proportionally

• Decreases

How does the per unit cost of variable costs behave as more units are produced?

• Becomes zero

• Increases

• Decreases

• Stays the same

Which type of cost is directly proportional to the cost driver activity?

• Fixed costs

• Neither fixed nor variable costs

• Variable costs

• Both fixed and variable costs

What does the per unit variable cost equal when three units are produced?

• $1

• $2

• $4

• $3

What concept will be explored in the next tutorial following this one?

• Cost allocation methods

• Relevant range

• Cost-volume-profit analysis

• Budgeting techniques