Variable costs are expenses that ________. a.remain constant on a per-unit basis but change in total based on activity level b.remain constant on a per-unit basis and remain constant in total regardless of activity level c.remain constant in total regardless of activity level within a relevant range d.decrease on a per-unit basis as activity level increases

Variable costs are expenses that ________. a.remain constant on a per-unit basis but change in total based on activity level b.remain constant on a per-unit basis and remain constant in total regardless of activity level c.remain constant in total regardless of activity level within a relevant range d.decrease on a per-unit basis as activity level increases

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Show how each of these costs will behave as the volume of activity decreases. Variable cost per unit Total variable cost Fixed cost per unit Total fixed cost A. Increase B. Decrease C. Remains the same
On a cost-volume-profit graph, the revenue line will be shown below the total expense line for any activity level above the break-even point. FALSE O TRUE
The break-even point is that level of activity where: Select one: O a. sales revenue eguals fixed cost. O b. variable cost equals fixed cost. Oc total contribution margin equals the sum of variable cost plus fixed cost. O d. sales revenue equals total variable.cost Oe. contribution margin equals fixed cost.
:Total Fixed costs the level of activity none of the given is correct .a increases with .b does not change at all with .c decreases with .d does not change within a relevant range
Variable costing income will be greater than absorption costing income when: a. Sales is greater than production. b. contribution pricing is applied c. Production is less than or equal to sales. d. Production is greater than sales
Under variable costing: a. Net operating income will always be higher than under absorption costing. b. Net operating income will tend to move up and down in response to changes in levels of production. O c.Inventory costs will be lower than under absorption costing. d. Net operating income will tend to vary inversely with production changes
1. Activity based costing is likely a more advantageous costing methold versus traditonal costing, to facilliate which of the following type of analysis? a) analysis of service organization cost b) analysis of channel profitablity c) analysis of long term profitablity d) analysis for reduction selling price of all products? 2. A ___ is any factor that causes a change in the cost of an activity. a) activity based cost b) cost pool c) cost driver d) standard 3. Which of the following is no a basic cost category for indirect cost? a) inventory financing cost b) Volume related cost c) Product batch cost d) activity based cost
When the level of activity decreases, variable cost will increase or decrease ?
All of the following represents a cost-volume-profit relationship except: a. Total contribution margin + variable xpenses = variable expenses + fixed expenses profit b. Sales = totalexpe expenses + profit O cSales - variable senses + profit = fied expenses O d. Profit = totalcontri contribution margin- fixed expenses O e Sales - Variable expenses = fixed expenses + profit
Which of the following statements regarding marginal costing is incorrect? Select one: O A. It is useful long-term planning technique OB. It assumes that fixed costs remain fixed over relevant activity ranges O C. It assumes that variable costs vary in proportion to activity O D. It assumes that costs can be classified as variable or fixed
Within the relevant range, as volume of activity increases a. Total fixed costs remain the sameb. Fixed cost per unit decreasesc. Variable cost per unit remains the samed.Total variable costs increasese. all of the above
Contribution margin is Oa. profit Ob. the excess of sales over variable costs Oc. Oc. another term for volume in the "cost-volume-profit" analysis Od. the same as sales revenue