1. A factor that causes or leads to a change in a cost or activity is a (n)
a. Driver.
b. Intercept.
c. Slope.
d. Variable term.
e. Cost object.

2. Which of the following would probably be a variable cost in a soda bottling plant?
a. Direct labor
b. Bottles
c. Carbonated water
d. Power to run the bottling machine
e. All of the above

3. Which of the following would probably be a fixed cost in an automobile insurance company?
a. Application forms
b. Time spent by adjusters to evaluate accidents
c. The salary of customer service representatives
d. All of the above

4. The following cost formula was developed by using monthly data for a hospital.
Total cost = $51,400 + ($125 × Number of patient days)
The term $51,400
a. Is the variable rate.
b. Is the intercept.
c. Is the dependent variable.
d. Is the independent variable.
e. Cannot be determined from the above formula.

5. The following cost formula was developed using monthly data for a hospital.
Total cost = $51,400 + ($125 × Number of patient days)
The term $125
a. Is the variable rate.
b. Is the intercept.
c. Is the dependent variable.
d. Is the independent variable.
e. Cannot be determined from the above formula.

6. The following cost formula was developed using monthly data for a hospital.
Total cost = $51,400 + ($125 × Number of patient days)
The term ‘‘Number of patient days’’
a. Is the variable rate.
b. Is the intercept.
c. Is the dependent variable.
d. Is the independent variable.
e. Cannot be determined from the above formula.

7. The following cost formula was developed using monthly data for a hospital.
Total cost = $51,400 + ($125 × Number of patient days)
The term ‘‘Total cost’’
a. Is the variable rate.
b. Is the intercept.
c. Is the dependent variable.
d. Is the independent variable.
e. Cannot be determined from the above formula.