HFT3431 Yost Quiz 6 Fall 2018

A sunk cost is:

a cost that has already been incurred.

As occupancy decreases, hotel managers should generally expect:

a decrease in total variable costs.

Which of the following types of costs is often used to evaluate the productivity of a department or area of responsibility?

a standard cost

Which of the following is not a fixed cost?

operating supplies

Which of the following types of costs is generally allocated among profit centers?

overhead costs

In January, the total fixed costs at the 250-room Vacation Hotel were $40,000. With 5,000 rooms sold in January, the average fixed cost per room sold was $8. The forecast for February projects a 10% increase in occupancy over January. If this increase in sales volume occurs, the total fixed costs for February would be:

relatively the same as in January.

The owner of the River Front Restaurant is renegotiating the operation's lease and has the option of either an annual fixed lease of $55,000 or a variable lease set at 5% of annual revenue. Which option costs less if annual revenue is expected to be $1,200,000?

the fixed lease

In the analysis of purchasing alternatives, the indifference point identifies:

the level of business activity at which costs are the same for each alternative.

The current cost of food sold at the Wharf Restaurant is 35% of sales. If sales increase, the restaurant manager should generally expect an increase in:

the total cost of food sold.

Which cost decreases the most on a per-unit basis as activity increases?

fixed