Estimating fixed and variable components of cost

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Question 1. Utilizing the high-low method of estimating fixed and variable components of cost, the variable portion is divided by the difference in activity/consumption between the high and low cost levels to find the variable cost per unit.

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False

Question 2. When performing a CVP analysis the Margin of Safety is the amount by which the sales exceed the break-even sales level.

True
False

Question 3. Under CVP & Absorption Cost one of the primary assumptions is that the firm is not a nonprofit organization.

True
False

Question 4. Variable (direct) costing is approved for use by public corporations under GAAP.

True
False

Question 5. When comparing absorption costing to variable costing the only difference is in the handling of fixed manufacturing overhead.

True
False

Reference no: EM131059774

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