1. The fixed cost per unit varies with changes in activity base.
   1. True
   2. False
2. A project supervisor’s salary is an example of a fixed cost.
   1. True
   2. False
3. Direct materials cost is an example of a fixed cost of production.
   1. True
   2. False
4. Total fixed costs change as volume of activity changes.
   1. True
   2. False
5. Variable costs are costs that remain constant in total dollar amount as the level of activity changes.
   1. True
   2. False
6. Variable costs are costs that remain constant on a per unit basis as the volume of manufacturing activity changes.
   1. True
   2. False
7. Variable costs are costs that vary in total in direct proportion to changes in an activity base.
   1. True
   2. False
8. Variable costs are costs that vary on a per unit basis with changes in an activity base.
   1. True
   2. False
9. Direct materials and direct labor cost are examples of variable costs of production.
   1. True
   2. False
10. total variable costs change as volume of activity changes.
    1. True
    2. False
11. A mixed cost has characteristics of both a variable and a fixed cost
    1. True
    2. False
12. Rental charges of $30,000 per year plus $2 for each machine hour over 15,000 hours is an example of a fixed cost,
    1. True
    2. False
13. A rental cost of $50,000 plus $.50 per machine use is an example of a mixed cost.
    1. True
    2. False
14. For purposes of analysis, mixed costs can generally be separated into the variable and fixed components.
    1. True
    2. False
15. Cost-volume -profit analysis can be presented in both equation form and graph form.
    1. True
    2. False
16. The point in operations at which revenues and expired costs are exactly equal is called the break-even poin.t
    1. True
    2. False
17. Break-even analysis is one type of cost-volume-profit analysis.
    1. True
    2. False
18. If fixed costs are $200,000 and variable costs are 75% of break-even sales, the break-even point is $800,000.
    1. True
    2. False
19. If property tax rates are increased, this change in fixed costs will result in a decrease in the break-even point.
    1. True
    2. False
20. If the yearly insurance premiums are increased, this change in fixed costs will result in an increase in the break-even point.
    1. True
    2. False
21. If the volume of sales is $4,000,000 and sales at the break-even point amounts to $3,200,000, the margin of safety is 25%.
    1. True
    2. False
22. If the volume of sales is $4,000,000 and sales at the break-even point amounts to $3,200,000, the margin of safety is 25%.
    1. True
    2. False
23. The ratio that indicates the percentage of each sales dollar available to cover the fixed costs and to provide operating income is termed the contribution margin ratio.
    1. True
    2. False
24. If sales total $1,000,000, fixed costs total $400,000, and variable costs are 55% of sales, the contribution margin ratio is 60%.
    1. True
    2. False
25. If sales total $1,000,000, fixed costs total $400,000, and variable costs are 55% of sales, the contribution margin ratio is 45%.
    1. True
    2. False

Answer rating: 100% (QA)

1 False The fixed cost per unit varies with changes in activity base The fixed cost per unit does not always remain constant with changes in the activity base For example if a company leases a factory ... View the full answer