ACC CH 18 Quiz

Which one of the following is not an assumption of CVP analysis? All costs are variable costs. All units produced are sold. The behavior of costs and revenues are linear within the relevant range. Sales mix remains constant.

All costs are variable costs.

Which of the following is not a mixed cost? Depreciation Car rental fee Telephone Expense Electricity

Depreciation

Which of the following is not a cost classification? Multiple Variable Mixed Fixed

Multiple

The equation which reflects a CVP income statement is: Sales = Cost of goods sold + Operating expenses + Net income. Sales + Fixed costs = Variable costs + Net income. Sales - Variable costs + Fixed costs = Net income. Sales - Variable costs - Fixed costs = Net income.

Sales - Variable costs - Fixed costs = Net income.

Which of the following would not be an acceptable way to express contribution margin? Sales minus unit costs. Unit selling price minus unit variable costs. Sales minus variable costs. Unit contribution margin divided by unit selling price

Sales minus unit costs.

Cost behavior analysis applies to: retailers. wholesalers. all entities. manufacturers.

all entities

Required sales in dollars to meet a target net income is computed by dividing: total costs plus target net income by contribution margin ratio. variable costs plus target net income by unit contribution margin. fixed costs plus target net income by unit contribution margin. fixed costs plus target net income by contribution margin ratio.

fixed costs plus target net income by contribution margin ratio.

The relevant range of activity refers to the: activity level where all costs are curvilinear. levels of activity over which the company expects to operate. geographical areas where the company plans to operate. level of activity where all costs are constant.

levels of activity over which the company expects to operate.

If a firm increases its activity level,: costs should remain the same. most costs will rise. no costs will remain the same. some costs will change, others will remain the same.

some costs will change, others will remain the same.

A CVP graph does not include a: total cost line. variable cost line. sales line. fixed cost line.

variable cost line