Accounting Help - Practice Questions

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Chapter 18: Practice questions

1-1The total manufacturing cost per unit increases as total production volume increases.

1-2Total variable costs change in response to changes in the volume of production.

1-3The mixed cost per unit is constant throughout the relevant range of activity.

1-4Fixed costs per unit decrease as production levels decrease.

1-5A method used to separate mixed costs into fixed and variable components is called the high-low method.

1-6The variable cost per unit is assumed to be constant within a particular relevant range of activity.

1-7Which of the following costs changes in direct proportion to a change in volume? A) Average mixed cost
B) Total fixed cost
C) Average variable cost
D) Total variable cost

1-8Which of the following is not a fixed cost?
A) Property taxes
B) Salary of plant manager
C) Indirect materials
D) Straight-line depreciation

1-9A 15% increase in production will result in:
A) a 15% increase in the variable cost per unit.
B) a 15% increase in total mixed costs.
C) a 15% increase in total manufacturing costs.
D) a 15% increase in total variable costs.

1-10Which of the following statements is correct with respect to variable cost per unit, within the relevant range? A) They will increase as production decreases.
B) They will decrease as production decreases.
C) They will remain the same as production levels change. D) They will decrease as production increases.

1-11 Which of the following statements is correct with respect to total variable costs, within the relevant range? A) They will decrease as production increases.
B) They will remain the same as production levels change. C) They will decrease as production decreases.
D) They will increase as production decreases.

1-12 Which of the following statements is correct with respect to total fixed costs, within the relevant range? A) They will remain the same as production levels change. B) They will increase as production decreases.

C) They will decrease as production decreases.
D) They will decrease as production increases.

1-13 Which of the following statements is correct with respect to fixed costs per unit? A) They will increase as production decreases.
B) They will decrease as production decreases.
C) They will remain the same as production levels change. D) They will increase as production increases.

1-14 Which of the following is a characteristic of a variable cost? A) Variable costs are variable per unit, and fixed in total. B) Variable costs vary in total with production and sales. C) Variable costs do not change in total over the relevant range. D) All of the above are characteristics of variable costs.

1-15Which of the following statements is not correct?
A) The total fixed cost is constant throughout the relevant range of activity. B) The breakeven point increases if variable costs increase. C) The margin of safety increases if fixed costs decrease. D) The mixed cost per unit is constant throughout the relevant range of activity.

1-16Which of the following statements describes variable costs? A) They are fixed in total throughout the relevant range of activity. B) They decrease on a per unit basis as production volume increases. C) They vary on a per unit basis but do not vary in total as production changes. D) They are constant on a per unit basis but vary in total as production changes.

1-17An electric bill for corporate headquarters is an example of what type of cost? A)...
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