1. Identify and describe fixed, variable, and mixed cost behavior. |
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2. Demonstrate the effects of operating leverage on profitability. |
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3. Prepare an income statement using the contribution margin approach. |
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4. Demonstrate how the magnitude of operating leverage affects profitability. |
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5. Demonstrate how the relevant range and decision context affect cost behavior. |
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6. Select an appropriate time period for calculating the average cost per unit. |
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7. Use the high-low method, scattergraphs, and regression analysis to estimate fixed and variable costs. |