Acct 241

A fixed cost remains constant in total and on a per unit basis at various levels of activity

False

Contribution margin is the amount of revenues remaining after deducting cost of goods sold

False

If the volume increases, all costs will increase

False

The margin of safety is the difference between contribution margin and fixed costs

False

The relevant range of activity is the activity level where the firm will earn income.

False

Which of the following is not a cost classification:

Multiple

A fixed cost is a cost which:

Remains constant in total with changed in the level of activity

Which of the following is an irrelevant cost:

Sunk

A special one-time order should never be accepted if the unit sales price is less than the variable cost.

True

A variable cost remains constant per unit at various levels of activity

True

Decision-making involves choosing among alternative courses of action

True

In incremental analysis, total variable costs will always change under alternative courses of action, and total fixed costs will always remain constant

True

The high-low method is used in classifying a mixed cost into its variable and fixed elements

True

Relevant costs are always:

Variable costs

Costs that will differ between alternatives and influence the outcome of a decision are:

relevant costs

In incremental analysis, total fixed costs will always remain n constant under alternative courses of action

true

A variable cost is a cost that:

varies in total in proportion to changes in the level of activity