MS.104 (30-39)

Which of the following activity bases would be the most appropriate for food costs of a hospital?

Number of patients who stay in the hospital

Which of the following costs is a mixed cost?

Rental costs of P5,000 per month plus P.30 per machine hour of use

Which of the following costs is an example of a cost that remains the same in total as the number of units produced changes?

Salary of a factory supervisor

Cost behavior refers to the manner in which:

a cost changes as the related activity changes

In a CVP graph, the slope of the total revenue line indicates the

rate at which the contribution margin changes as volume changes.

Most operating decisions of management focus on a narrow range of activity called the:

relevant range of production

The graph of a variable cost when plotted against its related activity base appears as a:

straight line

Which of the following is an example of a cost that varies in total as the number of units produced changes?

Direct materials cost

Which of the following is NOT an example of a cost that varies in total as the number of units produced changes?

Insurance premiums on factory building

Costs that remain constant in total peso amount as the level of activity changes are called:

fixed costs