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Homework Help: this right

Posted by scooby9132002 on Thursday, April 2, 2009 at 10:35pm.

7) . How should mixed costs be classified in CVP analysis? What approach is used to effect the appropriate classification?

Most of your costs are going to be semi-mixed/semi-variable. You will have to try to segregate the two types of costs, fixed and variable that's really the only way to do it. You have several options in how to separate them - either using your own judgment (i.e., work with management to determine what the cost would be if there would be no manufacturing activity?). The second method would be using statistics. Here, there are several options, like a scatter chart, regression analysis

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