Cost Behavior - Measuring Output and Relevant Range

The video tutorial explains cost behavior, focusing on how costs react to changes in production or sales. It covers cost-volume-profit analysis, data collection methods like the high-low method and regression analysis, and the concept of relevant range. The tutorial also discusses fixed, variable, and mixed costs, as well as step costs and their impact on production processes.

What is the primary focus of cost-volume-profit analysis?

• To calculate total fixed costs

• To assess changes in costs with production volume

• To determine the break-even point

• To evaluate the profitability of different products

Which method involves using the highest and lowest data points to estimate cost behavior?

• Break-even analysis

• Regression analysis

• Cost-volume-profit analysis

• High-low method

What is the relevant range in cost behavior analysis?

• The range of production where costs remain constant

• The range of production where only variable costs apply

• The range of production where costs vary randomly

• The range of production where only fixed costs apply

How do mixed costs behave within a relevant range?

• They have both fixed and variable components

• They remain constant

• They vary randomly

• They increase exponentially

What characterizes step costs?

• They increase linearly with production

• They increase in steps with changes in production levels

• They remain constant regardless of production

• They decrease with increased production