1 Classify the following fixed costs as normally being either committed or discretionary:

a. Depreciation on buildings.

b. Property taxes.

c. Research and development.

d. Maintenance on production equipment.

c. Office equipment leases.

f. Professional develment courses.

2 Does the concept of the relevant range apply to fixed costs? Explain.

3 What is the encost analysis? In what situations might this approach be used?

4 What is the purpose of preparing a scattergram?

5 Why is it potentially problematic that the high-low method only uses two data points to determine the cost function?

6 Give the general fomula for a mixed cost. Which term represents the variable cost? The fixed cost?

7 For a manufacturing company, what is the difference between how the gross margin and contribution margin are calculated?