Professional Documents
Culture Documents
Change
Change
inversely
inversely with
with
Fixed Costs Unchanged in
output
output
relation to output
Unchanged in
Fixed Costs More
More output
output == lower
lower
relation to output cost
cost per unit
per
unit
Copyright 2015 Pearson Education, Inc. All Rights Reserved
2- 13
Copyright 2015 Pearson Education, Inc. All Rights Reserved
2- 14
Cost drivera variable, such as the level of
activity or volume, that causally affects costs
over a given time span.
Relevant rangethe band or range of normal
activity level (or volume) in which there is a
specific relationship between the level of
activity (or volume) and the cost in question.
Forexample, fixed costs are considered fixed
only within the relevant range.