Which of the Following Methods of Determining Cost Behavior Uses

question 41

Multiple Choice

Which of the following methods of determining cost behavior uses average account values and average driver values to calculate fixed costs and variable rates?

• A)The industrial value costing method
• B)The account analysis method
• C)The learning average curve model
• D)The confidence interval driver model

---

Definitions:

Weighted Average Cost of Capital

Weighted Average Cost of Capital (WACC) is a calculation of a firm's cost of capital in which each category of capital is proportionately weighted.

Levered Cost of Capital

The cost of capital for a company that has debt in its capital structure, reflecting the additional risk introduced by the use of debt.

Debt-equity Ratio

A gauge for the relative amounts of shareholders' equity and debt in a company's asset financing approach.

Interest Tax Shield

The reduction in income taxes that results from taking the allowable interest expense deductions from taxable income.