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Operating capacity is the upper ____________ of an organization’s productive out

ID: 2418173 • Letter: O

Question

Operating capacity is the upper ____________ of an organization’s productive output capability, given its existing resources.

1.     Fixed unit costs vary ____________ with changes in activity or volume.

2.     Fixed costs may behave as step costs when activity is outside the _________ range.

E.      ______mixed_______ costs have both variable and fixed cost components.

1.      Many mixed costs vary with _____ _______ activity in a nonlinear fashion.

2.      Accountants use ____________ approximation to allow the inclusion of nonlinear costs in cost behavior analysis.

Explanation / Answer

Operating capacity is the upper limit of an organization’s productive output capability, given its existing resources.

Fixed unit costs vary as the level with changes in activity or volume.

Fixed costs may behave as step costs when activity is outside the short range.

mixed semi variable costs have both variable and fixed cost components.

Many mixed costs vary with operating activity in a nonlinear fashion.

Accountants use linear approximation to allow the inclusion of nonlinear costs in cost behavior analysis.