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1.      Understanding relations between costs and their cost drivers allows managers in all types of organizations to make proper short-run marketing decisions.
     
2.      Volume-driven costs can be easily traced to products or services.
     
3.      A telephone bill, which includes a monthly base rate plus an extra fee for each minute of long-distance service, is an example of a variable cost.
     

4.     Measurement of cost behavior means understanding and quantifying how activities of an organization affect its levels of costs.
     
5.     Linear-cost behavior is graphed using a straight or curved line.
     
6.     An example of a volume-driven cost in making a textbook is the salaries of the editorial staff.
     
7.     Step costs change abruptly at intervals of activity.
     
8.     Mixed costs contain elements of only fixed-cost behavior.
     


9.      Committed fixed costs usually arise from the possession of facilities, equipment, and basic organization.
     
10.      Committed fixed costs can be altered by management if management decides that different levels of spending are desirable.
     
11.     By their decisions, managers influence cost behavior throughout the entire value chain.
     

12.     Most companies make a capacity decision frequently.
     
13.     Capacity costs are the mixed costs of being able to achieve a desired level of production or service while maintaining product or service attributes.
     
14.     Companies cannot recover fixed capacity costs when demand falls during an economic downturn.
     
15.     An example of a committed fixed cost is insurance.
     
16.     Discretionary fixed costs have obvious relationships with levels of capacity or output activity.
     
17.     Managers cannot alter discretionary fixed costs easily.
     
18.     Managers can vary spending levels broadly in the short run.
     
19.     The use of high technology methods rather than labor usually means a much greater fixed-cost component to the total cost.
     
20.     The use of high technology methods rather than labor usually creates lesser risks for companies with wide variations in demand.
     
21.     One of the reasons why cost functions are important is to help managers make proper long-run decisions.
     
22.     The first step in estimating or predicting costs is cost measurement.
     
23.     Cost measurement is the estimating or predicting costs as a function of appropriate cost drivers.
     

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