Question Answers

1. Explain the operating leverage effects by the level of fixed cost and variable cost.
2. What is the Margin of Safety and how is it calculated?
3. Explain the process to find BEP Sales units of mixed two products.
4. What are the cost functions? Explain each component in a cost function and their cost behavior.
5. How could a manager control Fixed Costs? Explain it with the concepts of Committed and Discretionary Fixed Costs.
6. How does a manager choose a cost driver to measure future cost more accurately?
7. Describe and compare the cost function analysis methods.
  a. Account analysis
  b. High-low analysis
  c. Least-square regression analysis