Chapter 21, Problem E21.26E

To determine

Cost Behaviour: The cost behavior can be defined as the sensitivity of cost to changes in production level or the volume level changes. Some cost changes directly with the changes in the level of production, some cost do not change at all and some costs remain same within a relevant range and changes when the level of production moves out of relevant range.

Variable costs: The costs which change directly with the variations in the level of production are termed as variable costs.

Fixed costs: The costs which remain same even after variations in the level of output are termed as fixed costs.

Mixed costs: The costs that contain the elements of both variable and fixed cost.

Cost as Variable (V), fixed (F) or mixed (M)