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