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Ch 2 - Key Terms

Intro to Managerial Accounting

QuestionAnswer
Cost Behavior how the activities of an organization affect its cost
Cost Driver any output measure that causes cost (that is, Causes the use of costly resources)
Variable Cost a cost that changes in direct perportion to changes in the cost-driver level
Fixed Cost a cost that is not immediately affected by changes in the cost-driver level
Relevant Range the limit of cost-driver level within which a specific relationship between costs and the cost driver is valid
Cost-Volume-Profit(CVP) Analysis the study of the effects of output volume on revenue(sales), expenses (costs), and net income (net profit)
Created by: ljgarris