Which of the following statements is TRUE? O A. Variable costs per unit decrease as production levels increase. O B. Fixed costs per unit decrease as production levels increase. OC. Total indirect costs are always greater than total direct costs. O D. Direct costs are usually overheads.
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- In the cost equation Y=a+bx, Y represents which of the following? A. fixed costs B. variable costs C. total costs D. units of productionDescribe how total variable costs and unit variable costs behave with changes in the level of activityWhat is the term used to describe costs that increase in steps? A. Variable costs B. Fixed costs C. Mixed costs D. Semi-fixed costs
- Which of the following best describes a variable cost? A cost that: a. Represents a fixed proportion of total costs b. Has a direct relationship with outputc. Is sometimes also known as an indirect cos d. Falls on average, as output increases.Variable costs are costs that vary, in total, in direct proportion to changes in volume or level of activity. A True B False(a) Variable Costs are costs that change in direct proportion to changes in activity level. (b) Unit variable cost remain constant regardless of the level of activity a. Both statements are true b. Both statements are false c. Statement A is true and statement B is false d. Statement A is false and statement B is true
- What is happening to average costs when marginal cost is greater than average cost at a specific production level? A. Average cost is decreasing B. Average cost and marginal cost are equal C. Average cost is increasing D. Average cost is not changing AWhich of the following statements is CORRECT with respect to fixed costs per unit? Select one: A.They will decrease as production decreases. B.They will increase as production increases. C.They will increase as production decreases. D.They will remain the same as production levels change.Which of the following best describes a fixed cost? A. It may only change in total when such change is unrelated to changes in production volume (i.e. inflation). B. It may change in total when such change is related to changes in production volume. C. It is constant per unit of change in production volume. D. It may change in total when such change depends on production volume within the relevant range. QUESTION 2 Period costs are best described as those costs: A. Incurred periodically (i.e. not on a regular basis). B. Incurred as a result of activities that occur inside the production building. C. That increase as a result of a change in volume for a particular period. D. Incurred as a result of activities that occur outside of the production building. QUESTION 3 What is the result when the contribution margin ratio increases? A. Break-even point increases B. Fixed Cost…
- Which of the following statements is true regarding average fixed costs? Select one: a. Average fixed costs per unit fall as the level of activity rises. b. Average fixed costs per unit cannot be determined. c. Average fixed costs per unit remain fixed regardless of level of activity. d. Average fixed costs per unit rise as the level of activity rises.Which of the following costs has no relationship with the level of output?a) Semi-variable costs.b) Variable costs.c) Stepped fixed costs.d) Fixed costs.Which of the following best describes a fixed cost? a.Cost representing a fixed proportion of total costs b.Cost directly related to output c.Cost that remains at the same level up to a particular level of output . d.Cost that remains at the same level when output increases.