9 YES. AS THE ANTICIPATED LEVEL OF ACTIVITY ANALYSIS IS USED WHEN A...

5- - SOLUTIONS TO QUESTION MANAGERIAL ACCOUNTING CH05 COST BEHAIVIOR ANALYSSIS AND USE
SOLUTIONS TO QUESTION MANAGERIAL ACCOUNTING CH05 COST BEHAIVIOR ANALYSSIS AND USE

5-9

Yes. As the anticipated level of activity

analysis is used when a variable cost is a func-

changes, the level of fixed costs needed to sup-

tion of only a single factor. If a cost is a function

of more than one factor, multiple regression

port operations will also change. Most fixed

analysis should be used to analyze the behavior

costs are adjusted upward and downward in

of the cost.

large steps, rather than being absolutely fixed at

one level for all ranges of activity.