1. Which of the following statements is NOT true about costs perunitwithin the relevant range?
A. Fixed costs decrease in proportion to increases involume.
B. Mixed costs decrease but not in direct proportion toincreases in volume.
C. Variable costs stay constant with changes in volume.
D. Curvilinear costs stay constant with changes in volume.
2. How would the equation for total costs be written using thefollowing? y = total costs v = variable cost per unit of activity x= volume of activity f = total fixed costs
A. y = xv
B. y = xv + f
C. y = xf
D. y = f
3. A utility bill consisting of a monthly base, plus an addedamount based on usage, is classified as a:
A. fixed cost.
B. mixed cost.
C. curvilinear cost.
D. variable cost.
4. A company is analyzing its mixed costs. During July, itsbusiest month, a company had total labor hours of 14,000 and totalcosts of $40,000. During February, its slowest month, the companyhad labor hours of 8,000 and total costs of $25,000. The company isplanning for 12,000 direct labor hours next April. How many dollarsshould the company budget for fixed costsduring April?
A. $5,000
B. $6,000
C. $35,000
D. $36,000
5. A company is analyzing its mixed costs. During July, itsbusiest month, a company had total labor hours of 14,000 and totalcosts of $40,000. During February, its slowest month, the companyhad labor hours of 8,000 and total costs of $25,000. The company isplanning for 12,000 direct labor hours next April. How many dollarsshould the company budget for total costsduring April?
A. $5,000
B. $6,000
C. $30,000
D. $35,000
6. Which of the following statements is true regardingregression analysis?
A. Regression analysis considers all of the data points fordetermining the line that best fits the data so is usually moreaccurate than the high-low method.
B. Regression analysis helps generate a statistic, called theR-square, which tells how well the line fits the data points.
C. Regression analysis helps managers implement activity-basedcosting systems.
D. All of the above are true.
7. The difference between absorption costing and variablecosting is:
A. the treatment of fixed MOH.
B. the timing with which fixed MOH is expensed.
C. both of the above are differences.
D. none of the above are differences.
8. Which of the following is NOT true regarding an incomestatement organized according to the contribution marginapproach?
A. The contribution margin income statement is organized by costbehavior.
B. Operating income will always be the same as operating incomein a traditional income statement regardless of changes ininventory levels.
C. All fixed costs, including fixed MOH, are expensed below thecontribution margin line.
D. The contribution margin is equal to sales revenue minusvariable expenses.
