| A | B |
|---|
| cost behavior | refers to the way a cost changes as the level of a particular business activity changes |
| variable cost | costs that change in direct proportion to the changes in a particular business activity |
| fixed cost | cost that remain the same even though the level of activity changes |
| relevant range | the given range of activity and or period of time for which cost behavior is fixed |
| committed fixed cost | fixed cost that cannot be easily eliminated |
| discretaionary fixed cost | fixed costs that are usually based on decisions made for a fiscal period and that can be increased or decreased on an annual basis |
| contribution margin | contribution that a given department/product makes to the net income of a business |
| break even point | the point at which total revenue equals total cost |
| mixed cost | cost that are a part variable cost and part fixed cost |
| high low method | method used to determine the variable and fixed parts of a mixed cost |
