01 Oct Cost behavior refers to the manner in which
Managerial Accounting
Question 1. Cost behavior refers to the manner in which
a. a cost changes as the related activity changes
b. a cost is allocated to products
c. a cost is used in setting selling prices
d. a cost is estimated
Question 2Costs that remain constant in total dollar amount as the level of activity changes are called
a. fixed costs
b. mixed costs
c. product costs
d. variable costs
uestion 3. Which of the following costs is an example of a cost that remains the same in total as the number of units produced changes?
a. direct labor
b. salary of a factory supervisor
c. units-of-production depreciation on factory equipment
d. direct materials
Question 4Which of the following activity bases would be the most appropriate for gasoline costs of a delivery service?
a. number of truck drivers
b. total of miles driven
c. how many trucks are in service
d. number of packages picked up
Question 5Which of the following describes the behavior of a variable cost per unit?
a. varies in increasing proportion with changes in the activity level
b. varies in decreasing proportion with changes in the activity level
c. remains constant with changes in the activity level
d. varies in direct proportion with the activity level
Question 6Which of the following costs is a mixed cost?
a. salary of a factory supervisor
b. electricity costs of $3 per kilowatt-hour
c. rental costs of $10,000 per month plus $0.30 per machine hour of use
d. straight-line depreciation on factory equipment
Question 7Strait Co. manufactures office furniture. During the most productive month of the year, 3,000 desks were manufactured at a total cost of $59,000. In the month of lowest production the company made 1,125 desks at a cost of $38,000. Using the high-low method of cost estimation, total fixed costs are
a. $21,000
b. $25,400
c. $42,000
d.$13,000
Question 8. Which of the following statements is true regarding fixed and variable costs?
a. Both costs are constant when considered on a per-unit basis.
b. Both costs are constant when considered on a total basis.
c. Fixed costs are constant in total, and variable costs are constant per unit.
d. Variable costs are constant in total, and fixed costs vary in total.
Question 9The systematic examination of the relationships among selling prices, volume of sales and production, costs, and profits is termed
a. contribution margin analysis
b. cost-volume-profit analysis
c. budgetary analysis
d. gross profit analysis
Question 10If sales are $820,000, variable costs are 55% of sales, and operating income is $260,000, what is the contribution margin ratio?
a. 45%
b. 55%
c. 62%
d. 32%
