TRUE OR FALSE.1. If volume increases, all costs will increase.2. Changes in the level of activity will cause unit variable and unit fixed costs to change in oppositedirections3. The high-low method is used in classifying a mixed cost into its variable and fixed elements.4. A mixed cost has both selling and administrative cost elements.5. For planning purposes, mixed costs are generally grouped with fixed costs.6. Contribution margin is the amount of revenues remaining after deducting cost of goods sold.7. Both variable and fixed costs are included in calculating the contribution margin

"Since you have posted a question with multiple sub parts, we will solve first three sub parts for…

RUE OR FALSE. 1. If volume increases, all costs will increase. 2. Changes in the level of activity will cause unit variable and unit fixed costs to change in opposite directions 3. The high-low method is used in classifying a mixed cost into its variable and fixed elements.

RUE OR FALSE. 1. If volume increases, all costs will increase. 2. Changes in the level of activity will cause unit variable and unit fixed costs to change in opposite directions 3. The high-low method is used in classifying a mixed cost into its variable and fixed elements.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: Assume that a straight line on a CVP chart intersects the vertical axis at the level of fixed costs…

A: CVP Chart: Cost Volume Chart (CVP) chart refers to a graphical representation of the cost-volume…

Q: CVP analysis relies on the assumptions that costs are either strictly fixed or strictly variable.…

A: Introduction:- Cost-volume-profit analysis is used to measures how changes in variable and fixed…

Q: Variable cost varies _____ with output. a. Disproportionately b. Proportionately c. More than…

A: The different costs of production are classified as fixed costs and variable costs. The fixed cost…

Q: On a graph, the Total Variable costs line appears to be horizontal in nature. True False

A: Cost: In accounting, the cost is related to monetary value spend on raw material, services, and…

Q: Which of the following statements is true about fixed and variable costs? * Both costs are constant…

A: Solution:- When sales units are increases or decreases the total sales also increase or decreases…

Q: A total cost equation can be used to predict future costs for various activity levels. Write the…

A: Concept The total cost is the sum of variable cost and fixed cost incurred For example if variable…

Q: Q1. List the two types of fixed costs and give example. Q2. Present and explain the equation of the…

A: In accounting, the term "cost" refers to the monetary value or expenditure incurred by a business or…

Q: Within the relevant range, if there is a change in the level of the cos a. Total fixed costs and…

A: Fixed cost will change and total cost will remain the same.

Q: The reason for some costs to be mixed in nature is: 1. presence of sunken cost in the cost…

A: Mixed costs includes the nature of fixed costs as well nature of variable cost. Some part of the…

Q: Variable costs per unit are affected by an increase or decrease in activity. True or False True…

A: Variable Cost is that type of cost which is associated with the number of units produced or volume…

Q: a Total fed costs and total variable costs will change b. Total fxed costs and total variable costs…

A: Cost Driver - is the factor of cost due to change in cost driver cost of the activities also get…

Q: What is meant by an activity base when dealing with variable costs? Give several examples of…

A: Note: Since you have posted multiple questions, we will solve the first question. Please submit a…

Q: Costs that change in total but not proportionately with changes in the activity level are mixed…

A: The costs incurred during the production process can be classified as fixed, variable and mixed…

Q: costs in which there are variable components and fixed components.....

A: Fixed costs will not change with the change in the level of production. Variable costs will change…

Q: When output volume increases, do fixed costs per unit increase, decrease, or stay the same within…

A: Fixed Costs: These are the costs that remain constant in total dollar amount irrespective to the…

Q: 4.A scatter graph is used to test the assumption that the relationship between cost and…

A: Explanation and answer is given below,

Q: The cost that vary accordingly to the volume of output is O a. Variable cost O b. Both fixed and…

A: Variable cost means the cost which vary with the level of output and fixed cost means the cost which…

Q: Consider the following statements: (1) Total costs will equal the sum of fixed and variable costs.…

A: (1) Total costs will equal the sum of fixed and variable costs. This statement is true because fixed…

Q: Variable costs are costs that: Select one: a. Neither of the above b. vary in total directly and…

A: Variable costs is one of the one of the component of the total cost. Variable cost is the cost which…

Q: A technique used to split mixed costs into fixed and variable costs is called Select one: a. High…

A: The correct option is b. Behavior analysis method

Q: Opportunity costs are always: Multiple Cholce sunk costs. relevant costs. fixed costs. varlable…

A: Sunk Cost - It is a cost that has already been spend , and cannot be recovered back . Relevant…

Q: In order to have differential costs, only variable costs are allowed. Do you think so? Explain.

A: In case of different alternatives available for production, the difference between two alternatives…

Q: iable costs change in direct proportion to a change in the activity level. True or False?

A: There are two types of one is fixed cost and other is variable cost and both are part of the total…

Q: ariable costing is sometimes called a. differential b. direct

A: Variable costing is a costing system under which those costs of production that vary with output are…

Q: Relevant range is the activity that affects the increase or decrease of costs Select one: O True…

A: Lets first understand the meaning of relevant range. Relevant range is a range at which fixed cost…

Q: Explain how the high-low method determines:a. The variable portion of a semivariable cost.b. The…

A: This method is used to segregate variable cost and fixed cost. In this method, highest level of…

Q: The cost that is used for the benefit of many cost objects and cannot be easily related to any…

A: Answer is as follows

Q: What is a fixed cost? A variable cost? A mixed cost? Give an example of each

A: Costs are the expenses incurred in business. It means costs incurred for the manufacturing of…

Q: The simplifying assumption that costs and volume vary in straight-line relationships makes the…

A: Cost Volume Profit Analysis is a method of costing that has an impact on the varying levels of cost…

Q: Variable costs are costs that: a) Vary inversely proportional with changes in activity b) Remain…

A: Total variable costs increase with the increase in activity and decrease with the decrease in…

Concept explainers

Manufacturing Costs

Manufacturing cost is the total cost of procuring or producing a product. In other words, the manufacturing cost is the cost that an individual or business owner undertakes for the manufacturing of goods.

Question

TRUE OR FALSE.
1. If volume increases, all costs will increase.
2. Changes in the level of activity will cause unit variable and unit fixed costs to change in opposite
directions
3. The high-low method is used in classifying a mixed cost into its variable and fixed elements.
4. A mixed cost has both selling and administrative cost elements.
5. For planning purposes, mixed costs are generally grouped with fixed costs.
6. Contribution margin is the amount of revenues remaining after deducting cost of goods sold.
7. Both variable and fixed costs are included in calculating the contribution margin

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2 Introduction

VIEW

Step 3 Solution

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

The High-Low method is used to separate the variable and fixed elements of mixed costs. Select one: O a. TRUE O b. FALSE
Differential costs are synonymous with: Select one: a. variable costs b. relevant costs c. irrelevant costs d. sunk costs
3. What do you mean by fixed cost and variable cost.
On a graph, if a horizontal axis represents units of production and the vertical axis represents total costs, the total variable costs line would be shown as a(n): Question 4 options: horizontal line. vertical line. upward sloping line. downward sloping line.
When the level of activity decreases, variable cost will increase or decrease ?
Define cost behavior. Define and discuss how variable cost, fixed cost and mixed cost is different. Provide an example of each.
What happens to the total variable costs and the total fixed costs when the level of activity increases or decreases? How about the unit variable cost and the unit fixed cost?
Do you agree from the following statements- Explain in details with examples 1.Variable costs are controllable but fixed costs are not. 1.Sunk costs are irrelevant cost while making any decision.
A cost that has characteristics of both a variable cost and a fixed cost is called a Oa. variable/fixed cost Ob. sunk cost Oc. discretionary cost Od, mixed cost
The following statements are correct excerpt? O A. Only avoidable costs are relevant for decision making B. Incremental cost may include both variable and fixed costs OC. All irrelevant costs are sunk costs OD. All direct or indirect cost depends on the cost object
PLEASE ANSWER ALL Write “True” if the statement is true and write “False” if the statement is false. Fixed cost is constant in total amount regardless of changes in activity level within the relevantrange. Cost function is an express that mathematically links costs, their behavior, and their cost driver. As volume decreases within the relevant range, variable cost per unit remains the same andfixed cost per unit increases.
Within a relevant range, fixed costs per unit: Group of answer choices Decrease as the level of activity decreases. Decrease as the level of activity increases. Increase as the level of activity increases. Remain the same as the level of activity increases.