A High-Low Approach to Establishing Fixed and Variable Components of Costs

question 14

Multiple Choice

A high-low approach to establishing fixed and variable components of costs is most effective when information available is:

• A)Curvilinear.
• B)Erratic and highly fluctuating.
• C)Outside of the relevant range.
• D)Linear.

Calculate cost of goods sold (COGS) for a manufacturing firm.

Distinguish between direct and indirect materials costs.

Describe the three major categories of manufacturing costs.

Understand the purpose and components of a manufacturing statement.

---

Definitions:

Straitjacket

A garment designed to restrain someone, often used to prevent self-harm or harm to others, especially in psychiatric settings.

Economic Strategies

Plans or methods implemented to manage and improve an economy or individual financial standing.

Foreign Currency

The money of other countries, used in international trade and investment, and subject to exchange rate variations.

Nationalized

The process by which a government takes private industry or assets into public ownership.