Cornerstones of Cost Management (Cornerstones Series)
3rd Edition
ISBN: 9781285751788
Author: Don R. Hansen, Maryanne M. Mowen
Publisher: Cengage Learning
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Question
Chapter 3, Problem 29E
To determine
Identify the option that will result, if there is increase in production levels within a relevant range.
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Students have asked these similar questions
Which of the following is true about the changes in fixed cost?
An increase in production will result in an increase in per unit fixed cost.
A decrease in fixed cost will result in an increase in variable cost.
An increase in production will result in a decrease in per unit fixed cost.
A decrease in production will result in an increase in total fixed cost.
Within the relevant range:
Select one:
O A. variable cost per unit decreases as production decreases.
O B.
fixed cost per unit increases as production decreases.
O C.
fixed cost per unit decreases as production decreases.
O D. variable cost per unit increases as production decreases.
What is characteristic of variable costs within the relevant range?
A.
Decrease in total as as output increases
B.
Stay constant in total as output increases
C.
Decrease on a per-unit basis as output increases
D.
Stay constant on a per-unit basis as output changes
Chapter 3 Solutions
Cornerstones of Cost Management (Cornerstones Series)
Ch. 3 - Why is knowledge of cost behavior important for...Ch. 3 - How does the length of the time horizon affect the...Ch. 3 - Prob. 3DQCh. 3 - What is the relationship between flexible...Ch. 3 - What is the relationship between committed...Ch. 3 - Describe the difference between a variable cost...Ch. 3 - Why do mixed costs pose a problem when it comes to...Ch. 3 - Why is a scattergraph a good first step in...Ch. 3 - What are the advantages of the scatterplot method...Ch. 3 - Prob. 10DQ
Ch. 3 - What is meant by the best-fitting line? Is the...Ch. 3 - When is multiple regression required to explain...Ch. 3 - Explain the meaning of the learning curve. How do...Ch. 3 - Assume you are the manager responsible for...Ch. 3 - Some firms assign mixed costs to either the fixed...Ch. 3 - Callies Gym is a complete fitness center. Owner...Ch. 3 - Corazon Manufacturing Company has a purchasing...Ch. 3 - Darnell Poston, owner of Poston Manufacturing,...Ch. 3 - Dohini Manufacturing Company had the following 12...Ch. 3 - Refer to Cornerstone Exercise 3.4 for data on...Ch. 3 - Prob. 6CECh. 3 - The controller for Dohini Manufacturing Company...Ch. 3 - Prob. 8CECh. 3 - Classify the following costs of activity inputs as...Ch. 3 - SmokeCity, Inc., manufactures barbeque smokers....Ch. 3 - Cashion Company produces chemical mixtures for...Ch. 3 - For the following activities and their associated...Ch. 3 - Prob. 13ECh. 3 - Vargas, Inc., produces industrial machinery....Ch. 3 - Penny Davis runs the Shear Beauty Salon near a...Ch. 3 - Shirrell Blackthorn is the accountant for several...Ch. 3 - Deepa Dalal opened a free-standing radiology...Ch. 3 - Prob. 18ECh. 3 - The controller of the South Charleston plant of...Ch. 3 - Lassiter Company used the method of least squares...Ch. 3 - Sweet Dreams Bakery was started five years ago by...Ch. 3 - Prob. 22ECh. 3 - Bordner Company manufactures HVAC (heating,...Ch. 3 - Sharon Glessing, controller for Janson Company,...Ch. 3 - The graphs below represent cost behavior patterns...Ch. 3 - Starling Co. manufactures one product with a...Ch. 3 - Prob. 27ECh. 3 - Prob. 28ECh. 3 - Prob. 29ECh. 3 - Prob. 30ECh. 3 - Rolertyme Company manufactures roller skates. With...Ch. 3 - St. Teresas Medical Center (STMC) offers a number...Ch. 3 - Big Mikes, a large hardware store, has gathered...Ch. 3 - Kimball Company has developed the following cost...Ch. 3 - The management of Wheeler Company has decided to...Ch. 3 - DeMarco Company is developing a cost formula for...Ch. 3 - Prob. 37PCh. 3 - Friendly Bank is attempting to determine the cost...Ch. 3 - Randy Harris, controller, has been given the...Ch. 3 - Prob. 40PCh. 3 - Harriman Industries manufactures engines for the...Ch. 3 - Thames Assurance Company sells a variety of life...
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Similar questions
- When fixed costs increase and all other variables remain unchanged, the contribution margin will A. remain unchanged _____________________. B. increase C. decrease D. increase variable costs per unitarrow_forwardWhen should a segment be dropped? A. only when the decrease in total contribution margin is less than the decrease in fixed cost B. only when the decrease in total contribution margin is equal to fixed cost C. only when the increase in total contribution margin is more than the decrease in fixed cost D. only when the decrease in total contribution margin is less than the decrease in variable costarrow_forwardWhen variable costs increase and all other variables remain unchanged, the break-even point will ____________________. A. remain unchanged B. increase C. decrease D. produce a lower contribution marginarrow_forward
- Which of the following describes the behavior of the fixed cost per unit? a.remains constant with changes in production b.decreases with decreasing production c.decreases with increasing production d.increases with increasing productionarrow_forwardWhich 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 remain the same as production levels change. C. They will increase as production increases. D. They will increase as production decreases.arrow_forwardWhich 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.arrow_forward
- Show how each of these costs will behave as the volume of activity decreases. Variable cost per unit Total variable cost Fixed cost per unit Total fixed cost A. Increase B. Decrease C. Remains the samearrow_forwardWhen output volume increases, do fixed costs per unit increase, decrease, or stay the same within the relevant range of activity? Explain.arrow_forwardIf the level of activity increases within the relevant range, which of the following will also increase? Check all that apply. Check All That Apply Variable cost per unit. Fixed cost per unit. Total variable cost. Total fixed cost. Total cost.arrow_forward
- 1.) Explain the effects of an increase in the volume of activity on the following costs. (Assume volume remains within the relevant range .) a. Total variable costs. b. Variable cost per unit. Total fixed cpst . d. Fixed cost per unit. e. Total semi variable costs. f. Semi variable cost per unit .arrow_forwardThe increase/decrease in variable cost from existing level to the new level is called as __cost. a.Standard b.Marginal c.Fixed d.Opportunityarrow_forwardWhat is the effect of an increase in activity on the followingitems?a. Total variable costs.b. Variable costs per unit of activity.c. Total fixed costs.d. Fixed costs per unit of activity.arrow_forward
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