Lecture on Cost Behavior

Main objective of this lecture is to present on Cost Behavior. Managers who understand how Cost Behavior are better able to predict costs and make decisions under various circumstances. This chapter explores the meaning of variable, fixed and mixed costs. It also introduces a new income statement called the contribution approach. A variable cost is a cost whose total dollar amount varies in direct proportion to changes in the activity level. Your total long distance telephone bill is based on how many minutes you talk.